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19 20 Court Reporter: HARRY RAPAPORT, CSR
United States District Court
21 Two Uniondale Avenue
Uniondale, New York 11553
22 (516) 485-6558 23
Proceedings recorded by mechanical stenography, transcript
24 produced by Computer-Assisted Transcription 25


1 M O R N I N G S E S S I O N 2 3 (Whereupon, the following takes place in the
4 absence of the jury.)
5 THE COURT: Everybody here?
6 MR. DUNN: My client had a problem with a tooth.
7 He was at a dentist at 7:30 this morning. He should be
here shortly. But he explained to me and he wanted me to
9 tell you that it is okay to proceed.
10 THE COURT: He waives his presence and 11 understands he has a right to be here? 12 MR. DUNN: Yes, your Honor. 13 THE COURT: Going over the open matters now. 14 I revised the multiple conspiracy charge to 15 reflect the language that we discussed. Namely, if the 16 government establishes beyond a reasonable doubt that the 17 conspiracy, a conspiracy existed, the government must 18 prove that it is the single conspiracy alleged in the 19 indictment, etcetera. 20 Now, with respect to the Pinkerton charge, I have 21 somewhat revised the government's submission, which is the 22 Sand instruction, 19-13, as follows: There is another 23 method by which you may evaluate the possible guilt of all 24 the defendants other than the defendant Martin Reffsin -- 25 this having to do only with the mail fraud -- for the
1 substantive mail fraud charges in the indictment, even if 2 you do not find that the government satisfied its burden 3 of proof with respect to each element of the substantive 4 crime. If in light of my instructions you find beyond a 5 reasonable doubt that the defendant you are considering 6 was a member of the conspiracy charged in Count 1 of the 7 indictment and thus, guilty of the criminal charge, then you may also, and you are not required to -- and I 9 underlined this in the charge, then you may also, but are 10 not required to find him or her guilty of the substantive 11 mail fraud crime charged against him or her, provided you 12 find beyond a reasonable doubt each of the following five 13 elements. 14 First, that the mail fraud crime charged in the 15 substantive count was committed. 16 Second, that the person you find, person or 17 persons you find actually committed the charge were 18 members of the conspiracy you found existed. 19 Third, that the substantive crime was committed 20 pursuant to the common plan and understanding you found to 21 exist among the conspirators. 22 Fourth, that the defendant you are considering 23 was a member of that conspiracy at the time the 24 substantive crime was committed. And I am underlining 25 that also.

1 Fifth, that the defendant you are considering 2 could have reasonably foreseen that the substantive crime 3 might be committed by his co-conspirators. 4 If you find all five of these elements to exist 5 beyond a reasonable doubt, then you may find the defendant 6 you are considering guilty of the substantive mail fraud 7 crime charged against him or her, although he or she did not personally participate in the acts constituting 9 the crime, or did not have actual knowledge of it. 10 The reason for this rule is simply that a 11 co-conspirator who commits a substantive crime pursuant to 12 a conspiracy is deemed to be the agent of the other 13 conspirators. Therefore, all of the conspirators who were 14 members of the conspiracy at the time the substantive 15 crime was committed must bear criminal responsibility for 16 the commission of the substantive crimes. 17 If, however, you are not satisfied as to the 18 existence of any of these five elements, then you may not 19 find the defendant guilty of the substantive crime, unless 20 the government proves beyond a reasonable doubt that the 21 defendant personally committed, or aided and abetted the 22 commission of the substantive crime charged. 23 I will leave the lesser included for the time 24 being and get back to it. 25 The reliance charges. I am going to charge the


1 reliance charges by both the defendant Gordon and the 2 defendant Reffsin on the Tevya theory. 3 Is that similar to the res ips loquitur? No, it 4 is not. 5 MR. TRABULUS: Are you going to strike the other 6 charge, your Honor, the one we talked about. 7 THE COURT: I am going to charge exactly as you set it forth in your request, your second request to the 9 charge. 10 MR. TRABULUS: My concern with respect to the
11 Reffsin charge, the second paragraph, on the other hand -- 12 I think we talked about crossing out, on the other hand, 13 you are persuaded beyond a reasonable doubt that because 14 that can shift the burden. 15 THE COURT: Right. Correct, that comes out.
16 That portion comes out. 17 Now, as to the three defendants not in the 18 conspiracy during the periods of time, I have accepted -- 19 let's take Osman first, I have added to it. For example, 20 it says, if you find that the government proved beyond a 21 reasonable doubt the existence of the single conspiracy 22 alleged in count one of the indictment, I instruct you as 23 a matter of law the defendant Oral Frank Osman cannot 24 found to be a member of the conspiracy. And I added, or 25 guilty of the subsequent mail fraud counts.


1 MR. NELSON: Thank you, your Honor. 2 THE COURT: For the period of time. Correct? 3 MR. NELSON: Yes. 4 THE COURT: And then I add at the end, the 5 verdict sheet will set forth the names of each defendant 6 you will consider with regard to the mail fraud counts, 7 two through 52. MR. NELSON: That's acceptable, your Honor. 9 THE COURT: Then for Steve Rubin, I also added 10 the same thing I instruct you as a matter of law the 11 defendant Steve Rubin cannot be found to be a matter -- 12 guilty of the conspiracy or any of is substantive counts 13 before March of 1994 since he was not employed before that 14 date. And also, he cannot be found to be a member of the 15 conspiracy, or guilty of the mail fraud counts for the 16 period of time after March 17th, 1995. 17 Mr. Jenks, as far as the defendant Sterling Who's 18 Who. 19 MR. JENKS: Yes, your Honor. 20 THE COURT: The same thing with Sterling, 21 Mr. Jenks. Can't be guilty of the substantive mail fraud 22 count. 23 MR. JENKS: The verdict sheet seems to sort of 24 explain that. 25 THE COURT: I wanted to explain it anyway.
1 MR. JENKS: Yes. 2 THE COURT: That leaves the interesting subject 3 of the lesser included counts. 4 I have checked the law to the extent I could -- 5 of course, I can't keep up with Ms. Scott, but I try 6 because I have more help than she has. And as to the 7 Starnas, S T A R N A S, there is an interesting case that came back after -- came down after Starnas, and the point 9 is, should the jury be instructed that they must find the 10 defendant not guilty before they go to the lesser 11 included? Or should the jury be instructed that either 12 they find the defendant not guilty, or they are unable to 13 agree on a verdict. 14 Now, I happen to have written an opinion in the 15 Appellate Division -- I don't remember what it was or 16 when -- in which I soundly criticized the Starnas case. 17 And we were affirm by the New York Court of Appeals, but 18 we say in the state court it has nothing to do with this. 19 And I want to put on the record I am not a state court 20 judge. I don't have any state court leanings. I forgot 21 everything I learned in the state court. Please put that 22 on the record. But in the opinion I wrote I said that the 23 People have a right to get a decision on the main count 24 which they put in the indictment, which they tried to 25 prove, to put all their resources behind to prove that


1 count, not anything else, just that. And I said they have 2 a right to get an up or down decision on that. 3 Now, Judge Friendly did not agree with that. And 4 that was way before my time. But in a case called United 5 States against Torres, T O R R E S, decided many years 6 after Starnas, and the citation is 901 F.2d 205, Second 7 Circuit, 1990, cert. denied, 498 U.S. 906, and the Second Circuit again took up the interesting question. 9 The defendant contended in Torres, that in 10 accordance with Tsanas, he sought an instruction that -- 11 the judge in this I believe was Judge Mahoney who wrote 12 this, said in reviewing Starnas it calls for the Court to 13 instruct the jury to consider the greater offense first, 14 and then charge either, one, that it should consider the 15 lesser offense only, if it unanimously acquitted on the 16 greater; or, two, it should consider the lesser offense if 17 it could not agree on the greater. We added that neither 18 charge was wrong as a matter of law, but that the 19 defendant's preference should be honored upon request. 20 In this case the defendant made a request that 21 there be a unanimous decision on the main count, that 22 there be an acquittal before you go down to the lesser. 23 Then there was some talk about a special 24 interrogatory, which the Second Circuit said, don't use. 25 This is the interesting part of this decision,
1 and it is a field of law that is up in the air in the 2 federal court. It is about time that they took another 3 look at it. I am not suggesting that this case be the 4 vehicle for it, but listen to what the Second Circuit said 5 in 1990. 6 Quote, in any event, we do not believe that any 7 error which may have occurred in the District Court's instruction calls for reversal. As the foregoing recital 9 should make clear, this is a difficult and unsettled area 10 of the law, end quote. 11 I am going to charge the jury that they have to 12 acquit on the tax evasion before they may consider the 13 lesser included. I think that that is the proper rule of 14 law. It prevents compromises which we should not 15 tolerate. And that's what I am going to charge. 16 MR. TRABULUS: Your Honor, for the record, I 17 would except. 18 As I submitted the further request to charge 19 yesterday there was a drafting error. And as I submitted 20 it to you it left out the fact that the jury could 21 consider the lesser after acquitting. The one that I 22 submitted today on 7207 contains the correct language. 23 And I want to clarify what I would be requesting, and I 24 know your Honor has denied it. 25 It should read, and it is the final paragraph on


1 page 2 of the defendant Gordon's further request to 2 charge. 3 THE COURT: Is this your second or third? 4 MR. TRABULUS: The second one, the one I handed 5 up yesterday. The last sentence on the second page, after 6 the words "if you," the first two words, there should have 7 been included "unanimously find the defendant Bruce Gordon not guilty of tax evasion, or if you -- then it goes back 9 to the text. 10 The complete sentence would read: If you 11 unanimously find the defendant Bruce Gordon not guilty of 12 tax evasion, or if you should, after all reasonable 13 efforts be unable to reach a unanimous verdict on tax 14 evasion, you may then proceed to determine whether the 15 defendant has been proven guilty of the lesser offense of 16 willful failure to pay a tax when due. 17 Thank you. 18 THE COURT: All right. 19 With respect to the lesser included, this is 20 what -- first of all, Mr. Wallenstein, have you decided 21 whether you are entitled to it? 22 MR. WALLENSTEIN: I may be entitled to it, but I 23 don't want it, particularly if they have to find him first 24 not guilty on the first charge, and I will settle with 25 that.


1 THE COURT: I am a little confused myself on your 2 last request to charge, the one received this morning. 3 In your second request to charge where you raised 4 the lesser included, you say there is -- 5 MR. TRABULUS: What page? 6 THE COURT: Where you talk about 7203, and you 7 say failure to pay tax.
MR. TRABULUS: Willful failure to pay tax. 9 THE COURT: Yes.
10 7203 says that any person required by this title 11 or by regulations or authority thereof to -- requires to 12 make a return or willfully fails to make a return -- 13 MR. TRABULUS: You have to continue. 14 THE COURT: You mean the latter part of the 15 statute? 16 MR. TRABULUS: Yes. 17 THE COURT: I have to take a look at it. So hold 18 on for now. 19 I see now. I read this from another charge. 20 MR. TRABULUS: There is no Sand charge for this 21 arrangement. 22 THE COURT: I know that. And that's why I asked 23 you for help, Mr. Trabulus. 24 MR. TRABULUS: Yes. 25 THE COURT: Here is what I am going to charge on


1 the lesser included. 2 To get it straight again, the two lesser included 3 are filing a false tax return and willfully failing to pay
4 tax. 5 MR. TRABULUS: False document. I don't think it
6 should be a return. 7 THE COURT: The document being -- MR. TRABULUS: The document being some document 9 fi led in connection with the offer in compromise or the 10 offers in compromise. 11 THE COURT: What documents were those? 12 MR. TRABULUS: It is a whole bunch. I don't 13 think it should be a return. That would be wrong. 14 MS. SCOTT: The filing of a false return is a 15 felony, which is also charged. 16 THE COURT: All right. 17 Let's see if I have it here, and you can listen 18 to this and give me any corrections you want. 19 Lesser included offenses. 20 The law permits the jury to find the accused 21 guilty of any lesser offense, which is necessarily 22 included in the crime charged in the indictment. In this 23 case tax evasion. 24 Whenever such a course is consistent with the 25 facts found by the jury from the evidence in the case, and


1 with the law given and the instructions of the Court, if 2 the jury should unanimously find the accused not guilty of 3 the crime charged in Count 57, while finding Bruce Gordon 4 not guilty of the crime charged in Count 57 of the 5 indictment, namely, tax evasion, then you must proceed to 6 determine whether the guilt of the defendant has been 7 proven as to the lesser offenses which are necessarily included in the crime charged. The crime of willfully 9 attempting to evade or defeat a tax, which is the crime 10 charged in Count 57 of the indictment, necessarily
11 includes the lesser offenses of filing a false tax 12 document, and willful failure to pay tax when due, the 13 elements of which I shall now describe to you. 14 Filing of a false tax document. Section 7207 of 15 Title 26 of the United States Code provides as follows: 16 Any person who willfully delivers or discloses to the 17 Secretary of the Treasury any list, return, account, 18 statement or other document known by him to be fraudulent 19 or to be false as to any material matter shall be guilty 20 of an offense against the United States. 21 In considering this offense -- with regard to 22 this offense you should consider it independently of -- I 23 don't want to use "consider" twice. 24 See if you have any objection to this: With 25 regard to this offense you should consider it
1 independently of your review of the lesser included 2 offense of willfully failing to pay a tax when due. The 3 two lesser included offenses are independent of one
4 another and your verdict may properly be not guilty on 5 both, not guilty on one lesser include offense and guilty 6 on the other; or guilty on both lesser included offenses, 7 depending which course is consistent with the facts you find from the evidence in the case, and with the law given 9 and the instructions of the Court. 10 I shall now describe to you the elements of 11 filing a false document with the Internal Revenue Service 12 in violation of Section 7207 of the Internal Revenue 13 Service. 14 I have taken your instructions. I find they are 15 correct and I am adopting them, since I couldn't find 16 anything else. That's strange. 17 MR. TRABULUS: Yes. 18 THE COURT: Section -- I have already said what 19 the section provides. 20 I instruct you that filing a document with the 21 Internal Revenue Service constitutes delivery or 22 disclosure of that document to the secretary of the 23 treasury. 24 In order for the government to establish the 25 charge of filing a false document with the Internal


1 Revenue Service, it must establish beyond a reasonable 2 doubt each of the following two elements. 3 First, that the defendant Bruce Gordon filed a
4 document with the Internal Revenue Service which he knew
5 to be fraudulent or false as to a material matter;
6 Second, that the defendant Bruce Gordon did so
7 willfully; that is as a voluntary and intentional
violation of a known legal duty.
9 It is not necessary that the government be
10 deprived of the payment of any tax by reason of the filing
11 of the document, or that the document was filed with the 12 intent of evading the payment of any tax. 13 The time of the offense would have to be included 14 within the same time period as alleged in the tax evasion 15 counts. 16 The document or documents filed would have to

17 have been filed in connection with the offer in compromise 18 or the amended offer in compromise. 19 Therefore, if the government establishes beyond a 20 reasonable doubt that the defendant Bruce Gordon filed a 21 false or fraudulent document with the Internal Revenue 22 Service, knowing it to be such as to a material matter, 23 and he did so willfully in the deliberate violation of a 24 known legal duty, and not as a result of accident or 25 negligence, then you would have a sufficient basis on


1 which to convict him of that offense. 2 The second lesser included, willful failure to 3 pay tax when due.
4 I shall now instruct you as to the elements of
5 willful failure to pay tax when due.
6 In order for the government to prove the charge
7 of willful failure to pay tax when due, it must establish
beyond a reasonable doubt each of the following three
9 elements:
10 First, that at the time of the alleged offense
11 the defendant Bruce Gordon owed a federal tax that was 12 then due. That tax would have to be the same tax that is 13 alleged in the tax evasion count -- taxes representing an 14 income tax liability of Bruce Gordon from the years 1981 15 through 1990 at the time of the offense would also have to 16 be included within the same time period as alleged in the 17 tax evasion count. 18 Secondly, that the defendant Bruce Gordon did not 19 pay that tax at that time. 20 Third, that the defendant Bruce Gordon failed to 21 pay that tax knowingly and willfully. 22 An omission to act is done knowingly and 23 willfully if it is purposeful and willful, and not because 24 of mistake, accident, negligence, inability to perform the 25 act or other innocent reason.


1 A failure to act is done willfully, if it is a 2 voluntary and intentional violation of a known legal duty. 3 Therefore, if the government establishes beyond a
4 reasonable doubt that the defendant Bruce Gordon knew that
5 he had taxes which were then due, owed taxes which were
6 then due and he intentionally failed to pay them, and not
7 as a result of accident, negligent, or financial inability
to pay, then he would have willfully failed to pay taxes
9 when due, and you would have a sufficient basis on which
10 to convict him of that offense.
11 MR. TRABULUS: Your Honor, on that same further 12 request to charge that I filed yesterday, beginning on the 13 first page, there was material in bold type which 14 distinguishes tax evasion from willful omission to pay a 15 tax that is due, and sets forth the difference between tax 16 evasion which requires an affirmative active evasion, and 17 a failure to pay tax when due, it simply has the omission 18 to pay the tax. 19 I think it is important that that language, or 20 language that is substantially the same import, be 21 charged, so the jury understands that tax evasion requires 22 an affirmative act of evasion. 23 THE COURT: I will charge it. I agree. You are 24 referring to the matter in bold type? 25 MR. TRABULUS: Right.


1 THE COURT: And it goes to the middle of the 2 second page? 3 MR. TRABULUS: That's right.
4 THE COURT: Very well.
5 Anything else?
6 Now, I have --
7 MR. NELSON: Your Honor, over the evening I was
reviewing some of my notes, and there is one other request
9 to charge I would ask of the Court, and that's with
10 respect to judicial notice, Sand's 5-5. I asked the Court
11 to take judicial notice of the existence of the statute 12 under McKinney's law -- 13 THE COURT: I have not understood the first part, 14 judicial notice on what? 15 MR. NELSON: 5-5, the statute is McKinney's 16 Consolidated Law, McKinney's General Business Law, Section 17 396M, subdivision 3(b), as in Boy. 18 THE COURT: Have you got it there? 19 MR. NELSON: Yes, I do, your Honor. 20 THE COURT: Can I see it? 21 (Handed to the Court.) 22 THE COURT: That's the one about the 30-day 23 delay. 24 MR. NELSON: Yes, and the Court took judicial 25 notice on page 4,688 of the transcript during the


1 examination of Mr. West. 2 THE COURT: I will do that. 3 MR. NELSON: Thank you.
4 THE COURT: Anything else?
5 MR. NELSON: No, your Honor.
6 THE COURT: I wanted to ask counsel, Mr. Trabulus
7 and Mr. White, how to put the lesser included offenses in
the verdict sheet. And my idea is as follows: After I
9 put the tax evasion.
10 After Count 57, alleged evasion of payment of
11 tax, I will have to put that in the event the jury finds 12 the defendant Bruce Gordon not guilty of Count 57, you are 13 to answer -- you are to determine the two lesser included 14 offenses listed immediately below, something like that. 15 MR. TRABULUS: Your Honor, in light of your 16 Honor's ruling on the Starnas request that sounds correct, 17 and I say that without waiving my Starnas exception. 18 THE COURT: What do you think of that, 19 Mr. White? 20 MR. WHITE: That's fine, your Honor. 21 THE COURT: Anything else before we bring in the 22 jury when they get here? All ready to go? You are all 23 set, Mr. White? 24 MR. WHITE: I am ready, your Honor. 25 THE COURT: Are you sufficiently alert and a good


1 night's sleep and all of that? 2 MR. WHITE: I am alert. I wouldn't say I had a 3 good night sleep though.
4 Can I ask, your Honor, are we planning to take a
5 break at 11:00 o'clock?
7 What I propose to do is to tell the jury what
will happen, the order of summations, which I am going to
9 get right now.
10 I am going to tell the jury the order of
11 summations which I will confirm with you now, so make sure 12 there is no change. 13 The government's initial, or summation in 14 chief -- I will tell them that the government has a15 rebuttal summation also -- followed by the defendant 16 Martin Reffsin by John Wallenstein, the defendant Tara 17 Garboski by Gary Schoer, the defendant Who's Who and 18 Sterling Who's Who Who's Who by Edward Jenks, the 19 defendant Oral Frank Osman by Alan Nelson, the defendant 20 Steve Rubin by Thomas Dunn, the defendant Annette Haley by 21 Martin Geduldig, the defendant Laura Weitz by Winston Lee, 22 the defendant Scott Michaelson by James Neville, the 23 defendant Bruce Gordon by Norman Trabulus, followed by the 24 government's rebuttal. 25 Any objection to my telling the jury that?


1 MR. TRABULUS: No. 2 THE COURT: All right. 3 The jurors have all not arrived. As soon as they
4 are here we will start. They are filling out their menus

5 now, as a matter of fact.
6 MR. SCHOER: Judge, as you know, last night we
7 tried to establish a list of the exhibits. I have two
8 exhibits which I am just not sure of with respect to the
9 defendants, as to whether or not, first of all, they were
10 introduced, and what exactly they were.
11 I understand that your Honor was keeping an 12 informal list. So I would ask if you could just look at13 that list.14 THE COURT: Do you want to take a look at it?15 MR. SCHOER: Yes, Judge. 16 THE COURT: I don't think I put down any notes 17 that would be revealing next to these. 18 MR. SCHOER: The first question is whether in 19 fact they are in evidence. I am not sure they are. 20 THE COURT: Which are they? 21 MR. SCHOER: AK and AU. 22 THE COURT: I have AK as being in evidence. It 23 was an information charged against Steven Watstein. 24 MR. JENKS: Yes, that's in evidence. 25 MR. SCHOER: And AU?


1 THE COURT: AU I have for identification. 2 MR. TRABULUS: I am pretty sure it is a document 3 I questioned the witness about and it is not in evidence.
4 I can check. But I don't have it with me.
5 THE COURT: A letter from Sandra Barnes to
6 Bailey, April 8th --
7 MR. SCHOER: That's not in evidence.
8 THE COURT: Right.
9 MR. SCHOER: Thank you, Judge.
10 MR. TRABULUS: Can we take a five-minute break?
11 THE COURT: Sure. 12 MS. SCOTT: I have something --13 THE COURT: After Ms. Scott tells us.14 Before you do that, do you have the indictment in15 good shape? 16 MS. SCOTT: Yes, I do. 17 THE COURT: Did you make some for your 18 colleagues? 19 MS. SCOTT: Yes, I did. 20 THE COURT: Give them out to them, please. 21 (Distributed.) 22 THE COURT: This is the final one? 23 MS. SCOTT: Yes, but I forgot on the last page to 24 take out the reference to 7201 and the money laundering 25 count, so I have to print out the last page and


1 redistribute it. It is not the last page, but I believe 2 it is the second to the last page. 3 THE COURT: I don't know what you mean.
4 MS. SCOTT: Yesterday your Honor deleted the
5 reference to the tax code and the money laundering count.
6 And I had forgotten to do that, take that out and I will
7 do that.
8 THE COURT: That leaves only the concealing
9 count?
10 MS. SCOTT: Yes.
11 I have a question with respect to the defendant's 12 request to charge on 7203, and there is a section here13 that your Honor read into the record that an omission to14 act is done knowingly and willfully if it is purposeful,15 willful, and not because of mistake, accident, negligence, 16 inability to perform the act or other innocent reason. 17 I would just ask if you can take out inability to 18 perform the act or inability to pay? I have not found it 19 anywhere in Sand? 20 MR. TRABULUS: How can it be willful if someone 21 wasn't able to pay? 22 THE COURT: I will leave it in. Probably with 23 this kind of an offense, and I think it is a misdemeanor, 24 isn't it? 25 MR. TRABULUS: Yes.


1 THE COURT: With this kind of offense if you are 2 financially unable to pay it cannot been willful. I will 3 leave it in.
4 MS. SCOTT: All right. But it is not in Sand.
5 THE COURT: I know that. But I think it is so.
6 MS. SCOTT: Thank you, your Honor.
7 THE COURT: We will give you five minutes.

9 (Whereupon, a recess is taken.)
11 THE CLERK: Jury entering. 12 (Whereupon, the jury at this time entered the 13 courtroom.) 14 THE COURT: Good morning, members of the jury. 15 Please be seated. 16 Thank you again for your continued diligence, 17 sense of responsibility. 18 We are entering the closing phrase of this 19 trial. You will hear the summations or closing arguments 20 of counsel. 21 MR. NEVILLE: Your Honor, speaking of diligence, 22 can I go get Mr. Geduldig? 23 THE COURT: Surely. 24 (Whereupon, at this time there was a pause in the 25 proceedings.)


1 THE COURT: All right, first is now here. 2 Everybody was here very early this morning, 8:30, 3 as a matter of fact.
4 I will tell you what will be happening over the
5 next two days.
6 You will hear the summations and closing
7 arguments of counsel, probably in the following order.
First, the government's summation -- initial
9 summation or summation in chief, because the government
10 will have two summations, the first summation and the last
11 summation. 12 Following the government will be the defendant 13 Martin Reffsin by John Wallenstein. Then the defendant 14 Tara Garboski by Gary Schoer. Then the defendants Who's 15 Who Worldwide and Sterling Who's Who, by Edward Jenks. 16 Then the defendant Oral Frank Osman by Alan Nelson. Then 17 followed by the defendant Steve Rubin by Thomas Dunn. 18 Then the defendant Annette Haley by Martin Geduldig. 19 Which is then followed by the defendant Laura Weitz by

20 Winston Lee. Scott Michaelson by James Neville. Then the 21 final defense summation, the defendant Bruce Gordon by 22 Norman Trabulus. 23 After the defense summations the government will 24 have a rebuttal summation. That will conclude the 25 summations.


1 Now, I want to work as late as possible today and 2 tomorrow, so we can conclude the summations by tomorrow, 3 so I will be able to instruct you on the law on Thursday.
4 I would like to work as late as 6:00 o'clock tomorrow
5 afternoon if it is not going to inconvenience you very
6 much. The same thing tomorrow. Tomorrow we will
7 hopefully finish, whatever time it will be. Hopefully by
that time.
9 When you start your deliberations, we will work
10 until 6:00 o'clock. If you do not reach a verdict, you
11 will go home, come back the next day at 9:30 and start 12 deliberations again. 13 On Friday I have made a commitment to one of the 14 jurors to cease deliberations at 4:00 o'clock. You will 15 be under no time restraints of any kind. Take all the 16 time you need to fully consider the evidence, the issues 17 and the law. 18 You will have lunch at the expense of the United 19 States District Court. You will have from now on at our 20 expense, the Court's expense, lunch until you have reached 21 your verdict, your unanimous verdict, and that will be at 22 12:30 today hopefully. It may not fit in exactly right 23 with the summations, so we may have to change it around a 24 little bit. 25 Members of the jury, please give your attention


1 to the summation in chief of the government by Assistant 2 United States Attorney Ronald White. 3 Mr. White.
4 MR. WHITE: Thank you, your Honor.
5 Well, good morning.
6 It has taken quite a while, but you have now
7 heard all the evidence in the case. Soon you will be
called upon to decide it.
9 Now, first of all, as all the lawyers give their
10 closing arguments, it is a pretty good bet that we are not
11 going to agree on very much. But the one thing that I am 12 sure all of us, the government and the defense counsel, 13 what we will agree upon, is that we owe you, the jury, a 14 debt of gratitude for your service at this trial. 15 The trial has been long, I know. I am sure it 16 was boring at times. But throughout you have been 17 attentive, diligent, and your service as jurors is 18 something that we really do all thank you for. 19 Now, as Ms. Scott told you in the government's 20 opening statement back in January, this trial is about the 21 web of lies that was spun by the defendant Bruce Gordon 22 about the fraudulent schemes that he devised and he 23 carried out with the assistance of the other defendants. 24 Now, for the last nine or ten weeks you have 25 heard evidence about how Mr. Gordon, with the

Summation - White

1 participation of the other defendants, lied to the IRS, 2 lied to the bankruptcy court, and lied to tens of 3 thousands of customers of his business, all to line his
4 own pockets, cheat his customers out of their money.
5 You have heard that the defendants in the case
6 are charged with multiple counts and a variety of
7 different offenses. But all the charges basically fall
into two categories. The first category is the charges
9 against Mr. Gordon and Mr. Reffsin, arising from their
10 scheme to hide Mr. Gordon's income from the IRS and evade
11 payment of his back taxes. 12 Now, Mr. Gordon and Mr. Reffsin are charged with 13 tax evasion, and with conspiring to defraud the government 14 by impairing the IRS in the collection of his outstanding 15 tax liability, the three and a half million dollars that 16 you heard about. 17 As part of that overall scheme they are charged 18 with other more specific substantive offenses. 19 Mr. Gordon is charged with filing three false 20 collection information statements, those forms 433 that we 21 have seen during the trial. 22 Mr. Gordon is charged with filing false tax 23 returns for the years 1991 through 1994, where he 24 misrepresented his true income. 25 Mr. Reffsin is charged with assisting Mr. Gordon


Summation - White

1 with filing those same four false tax returns. 2 You also heard that in order to cover up this tax 3 fraud scheme Mr. Gordon and Mr. Reffsin are charged with
4 obstruction of justice for trying to obstruct the Who's
5 Who Worldwide bankruptcy proceedings by submitting phony
6 documents to the Court and lying under oath in those
7 proceedings.
Now, there are two obstruction of justice
9 counts. The first charge is Mr. Gordon and Mr. Reffsin,
10 relating to the phony usage logs for the Manhasset
11 condominium and that Manhattan penthouse. 12 Mr. Gordon and Reffsin are charged with 13 obstructing justice by ordering Maria Gaspar, the Who's 14 Who Worldwide controller who testified here to create 15 those logs, and by lying under oath about the use of the 16 condominium and the penthouse in the bankruptcy 17 proceeding. 18 Now, the second obstruction of justice count 19 relates only to Mr. Gordon, and that relates to his lying 20 about the ownership of Who's Who Worldwide. It relates to 21 his false statements in the bankruptcy petition and in his 22 sworn testimony where he said that his relatives, the 23 Grossmans, owned Who's Who Worldwide, and not him. 24 And you heard that Mr. Gordon is also charged 25 with money laundering, with taking the proceeds of a

Summation - White

1 crime, namely, the mail fraud that is charged here, the 2 Who's Who scheme, taking that money from Who's Who, 3 sending it to Publishing Ventures, Inc., that shell
4 corporation that he formed, and then using it to buy that
5 condominium and furnish it and maintain it. That was done
6 so nothing would be in his name. He did it to conceal his
7 ownership, his control in that money.
Now, the second category of charges relate to the
9 scheme to defraud the customers of Who's Who Worldwide and
10 Sterling Who's Who that Mr. Gordon devised and which the
11 other defendants helped him carry out, Tara Garboski, 12 Mr. Osman, who are managers there, Annette Haley, Scott 13 Michaelson, Laura Weitz, and Steve Rubin, who are 14 salespeople there. 15 In addition, the two corporations themselves, 16 Who's Who Worldwide and Sterling Who's Who are charged 17 with a conspiracy to commit mail fraud, and numerous 18 counts of mail fraud, for making the false 19 misrepresentations to customers. 20 You also heard in order to cover up the fact that 21 Who's Who Worldwide hadn't actually held a conference in 22 Vietnam and Hong Kong, and that Mr. Gordon lied at a civil 23 trial where he said it actually had taken place, and for 24 that he is also charged with perjury. 25 Now, the government submits that the evidence you

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1 heard at this trial establishes that the defendants 2 knowingly participated in these fraudulent schemes, and 3 that it proved beyond a reasonable doubt that they are
4 guilty of these crimes.
5 So, what I would like to do now is to review the
6 evidence that you heard at the trial and explain how the
7 government believes it proves the defendants' guilt.
Because the evidence at a trial, especially one
9 as long as this one, is kind of like a jigsaw puzzle. The
10 evidence comes in different forms from different
11 witnesses, at different times. It could sometimes be 12 difficult to figure out the significance of a particular 13 piece of evidence if you just look at it in isolation. So 14 what you need to do is to take a step back and look at the 15 whole picture and see how the pieces fit together. 16 So, what I am going to try to do is to show you 17 how all the pieces in this case fit together, and how, 18 when you look at them together they paint an unmistakeable 19 portrait of the defendant's guilt. 20 I will start with the first category of charges I 21 mentioned before, the one arising how Mr. Gordon's and 22 Mr. Reffsin's scheme to cheat the IRS. But first I need a 23 drink of water. 24 Now, you heard that by late 1991 Mr. Gordon owed 25 the IRS about three and a half million dollars in back

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1 taxes, including the penalties and the interest on that. 2 You heard that the back taxes and penalties were

3 the result of Mr. Gordon investing in and promoting what
4 we called abusive tax shelters between 1981 and 1990.
5 Now, there is no dispute at this trial that
6 Mr. Gordon owed the IRS this money. He even signed
7 agreements with the government to pay it back. So,
whether or not he owes these taxes isn't in issue. There
9 is no question that he did, and that he was supposed to
10 pay back those taxes and penalties.
11 What he and Mr. Reffsin are charged with doing is 12 evading the payment of that three and a half million by 13 concealing his income and his true financial condition 14 from the IRS when the IRS was trying to collect those back 15 taxes. 16 You heard Mr. Gordon sign two agreements with the 17 government with regard to the payment of those back taxes, 18 one was called the installment agreement, the other was 19 the collateral agreement.

20 The installment agreement was between Mr. Gordon 21 and the IRS. He signed it in September of '91. You will 22 remember it was signed by the IRS by a woman by the name 23 of Robbie Peters, whom you may recall was the very first 24 witness at this trial. In that agreement Mr. Gordon 25 agreed to repay his approximately three and a half million

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1 dollars in back taxes in installments of a hundred dollars 2 per month. The agreement provided that any change in his 3 financial condition would be grounds for the IRS to adjust
4 the amount that he was required to pay.
5 So, although he owed over three million
6 dollars, he had to pay just $1,200 a year under the
7 agreement. And you will recall he was able to get such a
good deal because he told Ms. Peters that he was so

9 strapped for money, that he had recently been living in
10 his car. And he submitted a disclosure form, one of those
11 433-A forms, where you said he was basically in desperate 12 financial straights. 13 Now, the second agreement he signed with the 14 government was the collateral agreement, which was with 15 the Department of Justice, Tax Division. And it covered a 16 particular portion of his tax liability, the one called 17 promoter penalties. And you will recall that those were 18 with respect to the tax shelters he created, and those 19 penalties added up to about $254,000. 20 Under the agreement he was required to pay those 21 penalties back based on a sliding scale of his income. 22 The more money he paid -- excuse me, the more money he 23 made, the more he would have to pay. And the scale went 24 to the point that he would have to give the government 25 half of everything he made over $50,000.

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1 The collateral agreement also contained an 2 important provision, that the income of any corporations 3 which he owned or controlled, would also be subject to
4 that same sliding scale.
5 So, even a part from whatever salary or
6 compensation that he got personally, any income that his
7 corporations, including Who's Who Worldwide, made, would
also have to be paid over to the government according to
9 that formula in that agreement.
10 Now, Mr. Gordon's huge back tax liability, and
11 these two agreements that he signed are the backdrop to 12 everything else that goes on after this. 13 So, as of the early 1990's, Mr. Gordon had a 14 built-in incentive to try to hide and minimize his income, 15 because he knew that the more money he made, the more 16 money he would have to pay to the IRS. If he told them he 17 was making a lot of money, they would tell him he has to 18 pay back as much of the three and a half million that he 19 could. If he told them that he didn't have much money and 20 that he was barely getting by, maybe they would allow him 21 just a small amount of what he owed. 22 So, I want to review with you chronologically all 23 the tax returns, disclosure forms, and financial documents 24 and letters that Mr. Gordon and Mr. Reffsin submitted to 25 the IRS between '91 and '95. And I am going to do that to

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1 show you how the evidence clearly demonstrated that they 2 were engaged in an illegal scheme to evade payments on the 3 back taxing and cheat the government.
4 Before I do that I want to mention a few points
5 you should keep in mind in analyzing the statements that
6 Mr. Gordon and Mr. Reffsin made to the IRS over those
7 several years.
Now, first of all, Mr. Trabulus in his opening
9 statement and in his questioning of various witnesses, he
10 suggested that this case was really just a technical
11 dispute about the tax law. That he and Mr. Gordon, they 12 desperately want you to believe that this is a case which 13 is about some narrow technical tax issue. They would have 14 you believe that Mr. Gordon just made an honest mistake, 15 he didn't know any better. That he and Mr. Reffsin, they 16 just didn't think certain things, like his loans from 17 Who's Who Worldwide had to be included on the tax returns 18 or on the 433s. 19 I suggest a couple of things you should keep in 20 mind as you review the evidence in determining what you

21 really think if that is really what went on here. 22 First of all, before we look at the specific 23 evidence, take a step back and look at the big picture. 24 As I mentioned before, Mr. Gordon has a big incentive to 25 make it look like he has very little income.

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1 So, how do Mr. Gordon and Mr. Reffsin arrange 2 Mr. Gordon's finances? Look at how his entire financial 3 life is organized.
4 He reports to the IRS he has no assets, and he is
5 just getting a basic salary from his company. In fact,
6 you heard that he is getting paid less than some of his
7 own employees. He is the president of the company and he
is making less than some new employees.
9 But then he has his company pay all his living
10 expenses. His utility bills, his Cablevision bills, his

11 medical and dental bills, his credit card bills, his 12 clothing, his jewelry, his vacation. 13 The company first pays his rent in 1990 through 14 '92. Starting in 1993 they actually own or rent two 15 luxury apartments for him. 16 The company leases a series of luxury cars for 17 him, a BMW, then a Lexus and then a Mercedes Benz. 18 What does that tell you? When you look at the 19 big picture, what does it tell you? 20 He has an incentive to make it look like he has 21 no assets. Do you think it is just a big coincidence that 22 he and Mr. Reffsin have structured his finances in a way 23 so that there is nothing in his name and the company pays 24 all his expenses? 25 They are not stupid people, Mr. Gordon and

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1 Mr. Reffsin. Do you think it just happened to work out 2 that way? 3 You heard Mr. Reffsin even admitted in his
4 testimony that he thought when he saw that situation, that
5 maybe Mr. Gordon was doing that to conceal his income.
6 Even he thought that, he admitted.
7 Now, his whole financial life is arranged in a
way that conceals just how lavage his lifestyle is. But
9 they would have you believe that that has absolutely
10 nothing to do with his outstanding back taxes, just a big
11 coincidence. 12 But you know, that if he paid for all those items 13 himself, his cars, his luxury apartments, his American 14 Express bills and everything else, he would have to pay 15 himself a bigger salary. But if he did that, the IRS 16 would see that big salary, and say, hey, if you are making 17 that kind of money, you can pay back the IRS some of the 18 three and a half million you owe us. 19 The IRS would say, hey, rather than using that 20 money to buy Armani suits and $16,000 watches, you can 21 give us some of it. 22 Now, if we can figure that out, don't you think 23 Mr. Gordon and Mr. Reffsin figured that out? 24 On top of that Mr. Gordon has not just one, but a 25 maze of different dummy corporations funneling him money

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1 and paying his personal expenses. 2 Now, remember this chart, 3 Government's Exhibit 837.
4 I am going to go over this in more detail later,
5 but look at all the corporations and bank accounts. What
6 is the explanation for all of this? What is the
7 explanation for hundreds of thousands of dollars being
shifted back and forth from one account to another? It
9 goes in one day, and a few days later it goes off to
10 somewhere else.
11 Well, you heard from Neil Ackerman, who was the 12 attorney for Who's Who Worldwide, he was Mr. Gordon's 13 friend, and that Mr. Gordon told him that one of the 14 reasons for the transfers among the corporations was 15 because of his personal tax situation with the IRS. 16 That is not the government telling you that. 17 That's Mr. Gordon's friend and attorney, Mr. Ackerman, 18 telling you that. 19 As I said before, when you are analyzing all the 20 individual pieces of evidence in the case, keep this in 21 mind. He owes the IRS millions of dollars, the more he 22 shows, the more he has to pay back. Ask yourselves, is it 23 just a coincidence that he merely set it up that all his 24 expenses were paid by the companies. 25 Another thing I ask you to keep in mind when

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1 analyzing the numerous tax charges is the numerous lies 2 that Mr. Gordon and Mr. Reffsin told the IRS. 3 Now, if, as Mr. Trabulus suggests, Mr. Gordon
4 made an honest mistake, he just didn't realize that
5 certain monies should be considered income, or certain
6 items should have been disclosed on those forms, then
7 there is no reason at all to lie. If they honestly
thought that what they were doing was proper, they would
9 have no reason to lie.
10 But you heard evidence that they lied repeatedly
11 to the IRS. And I will review these items specifically as 12 we go through the evidence. But I want to highlight a few 13 of the most blatant lies they told the IRS. 14 Now, first of all, you heard that Mr. Gordon lied 15 to the IRS about getting a loan from his sister, Joyce 16 Grossman to pay for his son's funeral expenses. You will 17 remember that in late '93 or early '94, when the IRS was 18 evaluating Mr. Gordon's offer in compromise, 19 Mr. Gagliardi, he was the revenue officer who was the 20 second witness at the trial, that he asked Mr. Gordon and 21 Mr. Reffsin for copies of Gordon's personal bank account 22 statement. And he noticed several unusually large 23 deposits in the summer of '93. And he asked Mr. Gordon 24 through Mr. Reffsin what those deposits were for. 25 You will recall Mr. Reffsin wrote back to him,

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1 and in the letter he explained that Mr. Gordon's son had 2 died in July of '93, and that the money he saw -- that 3 Gagliardi saw, was transferred into Mr. Gordon's account
4 around that time from Joyce Grossman, that it was a loan
5 from Ms. Grossman to help him pay his son's funeral
6 expenses.
7 As proof of the loan Mr. Reffsin's letter
actually attached a copy of the written promissory note.
9 It was signed by Mr. Gordon, in which he promised to pay
10 the $15,000 back to Joyce Grossman.
11 This is it, Exhibit 425-A, this is the note. 12 But you heard that this story was completely and 13 utterly bogus. You heard that the $15,000 wasn't from 14 Joyce Grossman. It was really just a wire transfer of 15 money from Who's Who Worldwide to Mr. Gordon. It was one 16 of these so called loans of his. 17 You will remember that the date on the promissory 18 note, which is July 25th, 1993, that's when he supposedly 19 borrowed the money from Joyce Grossman. But the date of 20 his son's death, according to the death certificate is 21 July 28th, 1993. The dates just don't match. Mr. Gordon 22 was supposedly borrowing money to pay his son's funeral 23 expenses. But on that day his son hadn't even died yet. 24 Now, when the death certificate was admitted in 25 evidence, it was with Mr. Gagliardi.

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1 Now, Mr. Trabulus asked some interesting 2 questions. You will remember that it was Mr. Gagliardi 3 from the IRS on the witness stand, and Mr. Trabulus asked
4 in substance, well, if that was an emergency situation and
5 somebody needed a loan in a hurry, they might just loan
6 the money, especially to a family member, and then go back
7 and make up a promissory note later, right? That's what
he asked him.
9 And Gagliardi said, in substance, yes, that
10 sounds reasonable. I guess that can happen.
11 Mr. Trabulus went on, well, if they did that, 12 when they were upset from a death in the family, they may 13 not be careful and put the wrong date on the promissory 14 note? 15 Again, Gagliardi said, well, I guess so. 16 That's a nice theory, and you might have been 17 saying to yourself at the time, well, that's possible. 18 Maybe that's what happened. But there is one problem. 19 That's not what happened. How do you know that? 20 Because a few days later Mr. Gordon's own sister, 21 Joyce Grossman, came into this courtroom and she told you 22 she had never loaned Mr. Gordon that money, and she had 23 never seen this promissory note. 24 So, what were all those questions that 25 Mr. Trabulus was asking Mr. Gagliardi?

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1 You see, they are desperately hoping that you 2 will not focus on Mr. Gordon's lies. 3 Now, what does this incident tell you about
4 Mr. Gordon's intent, his state of mind?
5 Well, if he has nothing to hide, why is he
6 lying? If he has nothing to hide, why is he making up
7 this phony story about his sister, about a loan from his
testimony? If he has nothing to hide, why is he creating
9 and submitting bogus documents to the IRS?
10 Ask yourselves, if he is just an honest taxpayer
11 who made an innocent mistake in filling out some 12 complicated tax forms, why, as Mr. Trabulus would have you 13 believe, is he lying? 14 As you analyze all the other evidence in the 15 case, and you try to decide what Mr. Gordon's intent was, 16 just stop and think for a moment about what Mr. Gordon did 17 here. He lied about his own son's death just to save 18 himself from paying a few extra dollars in taxes. He 19 exploited his son's tragic death, just so he can pocket a 20 few extra bucks. He took a terrible tragedy, like the 21 loss of a child, and tried to use it to help his plan to 22 cheat the IRS. 23 When you consider Mr. Gordon's intent here, keep 24 that in mind. That's the kind of man you are dealing with 25 here, the kind who takes the unkindly death of his young

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1 son as an opportunity to make a quick buck. 2 Now, what other lies did Mr. Gordon and 3 Mr. Reffsin tell, which would show you that they are
4 knowingly defrauding the IRS information?
5 Well, you heard that they lie about the ownership
6 of Who's Who Worldwide and Mr. Gordon's other
7 corporations. In all the 433 forms they specifically ask
for what stocks you own and what assets you have.
9 Although Mr. Gordon owns 75 percent of a
10 corporation that is doing millions of dollars of business,
11 he never mentions it. 12 Again, you know he owns 75 percent because his 13 own sister, Joyce Grossman, and her husband, Dr. Richard 14 Grossman, told you that they always owned 25 percent and 15 Mr. Gordon owned the rest. And there are letters from 16 Mr. Gordon to Dr. And Mrs. Grossman explaining that they 17 are going to own only 20 percent -- 25 percent. 18 You heard that Mr. Gordon testified on several 19 occasions that he owns 75 percent. And you saw how he and 20 Mr. Reffsin created backdated and phony documents. 21 Remember, there were letters, stock certificates 22 and other documents to try to show that he owned nothing 23 and the Grossmans owned 100 percent. 24 Again, I will go into more detail about those 25 things later. But ask yourselves again, why are they

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1 lying?

2 Remember that Dr. Grossman told you that he 3 confronted Mr. Grossman after he learned that Mr. Gordon
4 had been misrepresenting that the Grossmans owned the
5 whole company.
6 Remember what Dr. Grossman said Mr. Gordon's
7 response was? He said Mr. Gordon said, I forgot. I
thought you did own 100 percent of the company.
9 He forgot? Ladies and gentlemen, he forgot? He
10 forgot he owned the company? It is hard to say that with
11 a straight face. That's about the lamest story anybody 12 ever heard. I forgot. It is the legal equivalent of the 13 dog ate my homework. How could he forget he owned the 14 company? 15 He works there day after day, five years, running 16 the whole show. And he just forgets he owned the 17 company? 18 Think of a real life example to show you how 19 ridiculous that that story is. Think about the single 20 most expensive thing each of you own, your biggest asset, 21 your most valuable possession. For some of you it might 22 be your home if you own it. For some of you it might be 23 your car or maybe a piece of jewelry, or something like 24 that. Do you think you would ever just forget that you 25 own your most valuable possession?

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1 If you owned a home and you are out in front 2 raking your leafs and a neighbor comes by and says, do you 3 own this house?
4 You say, gee, I don't know, maybe my sister and
5 brother-in-law own it, but I am not really sure.
6 So, why did they lie about that?
7 The big reason again is the collateral agreement.
It says if Mr. Gordon owns or controls any
9 corporation the income is subject to being repaid to the
10 IRS subject to that agreement.

11 These companies are making a lot of money. Half 12 of what they make is supposed to go to the IRS if they 13 come under that agreement. And that is precisely why 14 Mr. Gordon doesn't want the IRS to know that, because then 15 he will have to end up paying back what he owes. 16 How else do you know that this is just not an 17 honest mistake of what needed to be included in the tax 18 forms? 19 Look at the conflicting statements that 20 Mr. Reffsin made at different times. He can't even get 21 his story straight. 22 First let's talk about these loans, the supposed 23 loans that Mr. Gordon took. 24 Now, when he was interviewed by Agent Jordan, 25 Mr. Reffsin said that Mr. Gordon had made little or no

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1 repayments on these loans; that Mr. Reffsin said that he 2 and another accountant that worked for him were concerned 3 that this was really income. And he says, he talked to
4 Mr. Gordon and told him, that those loans, if you don't
5 pay them back, could be a problem. And Mr. Gordon said
6 basically I will deal with it at that time. I will deal
7 with it when it becomes a problem.
Now at the trial Mr. Reffsin has got another
9 story. This one is, well, they are not income. They are
10 just loans. I was concerned before, but no, that really
11 wasn't true. 12 Now at the trial he says, well, there really were 13 repayments, and that's why I thought that it was okay. 14 That they really were loans. But before he said there 15 were little or no repayments. 16 Then he also, all of a sudden, remembers that 17 when he had this conversation with Mr. Gordon, Mr. Gordon 18 told him he would repay the loans back.

19 The first time he told him Mr. Gordon didn't say 20 anything about paying him back. Now he is here and he 21 knows that's the big issue, he is going to say, well, 22 Mr. Gordon, he told me that, too. 23 What else did Mr. Reffsin change his story 24 about? 25 Again, he told Agent Jordan in an interview that

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1 he thought, Mr. Reffsin thought, that what Gordon was 2 telling him about using the condo for business was, in his 3 words "bullshit."
4 That was his words "bullshit," which is a pretty
5 strong word to tell federal agents, that what Mr. Gordon
6 was telling Mr. Gordon was bullshit.
7 Now at the trial he says, I don't know, maybe
Mr. Gordon was BS'ing, maybe I don't know one way or
9 another.
10 You also said that in an interview with
11 Mr. Jordan, Mr. Reffsin changed his story about the phony 12 logs submitted to the bankruptcy court. 13 First he denied everything about the logs. He is 14 putting as much distance between him and those logs as he 15 can. He says, I have never even seen them. I don't know 16 what was in them. I don't know who prepared them, I 17 didn't have any conversations with anyone about them, and 18 I don't know if they were falsified. 19 Then he is asked about them again later in the 20 interview, and he miraculously recovers his memory. Now 21 he recalls he really did talk to Mr. Gordon about the 22 logs, and he has a whole story about that. All of a 23 sudden he knows an awful lot about these logs. 24 You also heard that there was money that was 25 transferred from Who's Who Worldwide to Sterling and

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1 Publishing Ventures, and there were various notes created. 2 You heard that Mr. Gordon gave -- I am sorry, 3 Mr. Reffsin gave a whole series conflicting stories about
4 when he first saw those notes. He said four different
5 things at different points in the interview.
6 He said, first, they were prepared at the time
7 the loans were made; then they were prepared at a later
date, but he didn't know when; then he didn't learn of
9 them until three or four months before the bankruptcy
10 filing; then it was, I learned about it the night before
11 the bankruptcy filing. 12 You know all four of them are false, because as 13 he admitted in his own testimony, Mr. Adler, who also 14 testified here, he is the one that Mr. Reffsin hired for 15 Who's Who Worldwide, that Mr. Adler hadn't even created 16 those documents until after the bankruptcy.

17 Then you heard Mr. Reffsin lied under oath in his 18 deposition in the bankruptcy case, and the transcript is 19 an exhibit here at the trial. 20 A month after he created those notes, Mr. Reffsin 21 testified they were created back in '93, the time when the 22 condo was purchased. 23 So look at all the lies Mr. Reffsin and 24 Mr. Gordon told when you are trying to determine if they 25 are knowingly defrauding the IRS or they are just making

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1 an honest mistake. 2 Ask yourself if those are simple errors, just 3 honest mistakes or just a pattern of deception.
4 You will see the common thread, the common theme
5 of these lies, and that is that they all conceal
6 Mr. Gordon's income and lifestyle.
7 Ask yourself if you feel it is just a big
coincidence, that all the information that just doesn't
9 happen to get disclosed to the IRS, just happens to be
10 information about his lavish spending and true income. Do
11 you think it just innocently turned out that way? 12 Now, let's go back to the beginning. You will 13 remember in December of '91 Mr. Gordon owes three and a 14 half million in taxes. So, before they sign any agreement 15 with Mr. Gordon, the IRS wants to know what his financial 16 condition is, so Ms. Peters, the IRS revenue officer asks 17 Mr. Gordon to fill out a 433-A form. And let's take a 18 look at that form. 19 Now, as I said before, Mr. Gordon is charged with 20 not just conspiring to defraud the IRS and submitting 21 these documents as part of that, but as a substantive 22 crime for submitting this false documents. 23 How is it false? 24 Look at page 22, box 22, and asking here for bank

25 charge cards, he writes NA.

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1 If you look at page 4, it also has a box asking 2 for other liabilities. And it says include other charge 3 account.
4 One way or another it is supposed to be there.
5 Now, you heard he had an American Express card
6 since November of 1990. This is in September of '91. And
7 this very same months he is using his Amex card like
9 Now, is that just an innocent mistake? Did he
10 just forget he had an American Express card? Do you think
11 he didn't think he had to list it? 12 Of course not. 13 How do you know that? 14 He got a look at this form in context. Because 15 if you remember, about a year and a half later when they 16 submitted that offer in compromise and Mr. Gagliardi is 17 making requests for information, he is asking them for all 18 documents regarding Mr. Gordon's monthly payments if they 19 are not paid by his personal check. 20 You know that American Express charges are paid 21 by corporate check for Mr. Gordon. 22 So, if Mr. Gordon had nothing to hide, if he just 23 didn't understand this form, or forgot about it, or didn't 24 think it applied, you would think that when he is asked 25 for that information he would give it to Mr. Gagliardi.

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1 But he doesn't. Gagliardi gets nothing on that score. 2 Why? 3 Because if Gordon and Reffsin gave Gagliardi
4 that, he would find out the astonishing amounts of money
5 that Mr. Gordon was charging on his American Express
6 bill.
7 This is a perfect illustration of what I said
earlier, is that you have to look at Mr. Gordon's and
9 Mr. Reffsin's lies as the backdrop to everything else in
10 the case.
11 When you look at the answers on this form in 12 context, you see the pattern. You see that it was done 13 intentionally. It was done to deceive the IRS. It is not 14 an innocent mistake or omission. 15 Look at page 3, line 29, where it asks for 16 stocks, bonds and investments. 17 He said he has basically no equity in any stocks, 18 bonds, investments. 19 But the Grossmans told you they own 25 percent 20 and Mr. Gordon owns 75 percent of the companies. And you 21 heard Mr. Gordon testify to that in other lawsuits. 22 If you look at the company's 1991 return, which 23 is the comparable one, it tells you how much the company 24 is worth. Line 25, it has the profits that the company 25 has made that are still unaccounted for basically. It is

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1 $16,000. So, he owns 75 percent of that, and stock worth 2 about $12,000. It is not listed. 3 Now, how else do you know that he is trying to
4 hide his ownership? Look at page 1, box seven where
5 Mr. Gordon lists his occupation.
6 He is the head of the company, however he wants
7 to call himself, president, chairman, CEO, whatever. He
called the shots. And there is no dispute that he is in
9 charge of the company.
10 Do you think it is odd that he describes himself
11 as the sales manager? Doesn't it sound that he is just 12 trying to make himself sound like just another company 13 employee? 14 Now, let's look at necessary living expenses on 15 page 4. 16 He lists his household expenses. And where he 17 has other, he has $175 a month. 18 When you look at his American Express bills, he 19 is charging $8,000 a month at this time. 20 From January of '91 to September of '91 when 21 Mr. Gordon is filling out this form, the company has paid 22 over $101,000 in his personal expenses in those nine 23 months immediately preceding this form. 24 Now, Mr. Trabulus suggested that this category, 25 necessary living expenses means just the necessary ones,

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1 not the actual ones. 2 He suggested that maybe Mr. Gordon thought he 3 didn't have to list all his expense, just the absolute
4 bear necessities.
5 So, let's humor him and let's take a look at that
6 theory.
7 As I said before, when you look at Mr. Gordon's
answers in context, you will see that that argument is
9 ridiculous. Under Mr. Trabulus' theory, Mr. Gordon is not
10 trying to hide he is spending a lot of money on
11 unnecessary things. He thinks he just has to list the 12 necessary ones. 13 Again, if that's the case and he really has 14 nothing to hide and he just misunderstands the question, 15 why do he and Mr. Reffsin conceal his expenses when 16 Mr. Gagliardi asks about them a little bit later in '93? 17 Again, Gagliardi asks for all the checks that 18 Mr. Gordon writes, proof of all the payments, if not paid 19 by his personal check. Both of those items would reveal 20 Mr. Gordon's extravagant spending. If they are not trying 21 to conceal anything, you would expect they disclose that 22 to Gagliardi when he asks for it, but they don't. 23 What does it tell you as to whether this answer 24 on this 433 form is just an innocent mistake, or whether 25 it is an intentional lie?

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1 That's not the only time that Mr. Gordon conceals 2 his true expenses from the IRS. In August of '93 they 3 submitted an offer in compromise. Included in there is a
4 list of the Mr. Gordon's expenses, actual expenses through
5 1991, and a projection up through 1996. And it showed
6 that Mr. Gordon couldn't even begin to pay back all his
7 debts. It said his income barely covered his expenses.
Now, this was not a form prepared by the IRS.
9 This is their own summary of Mr. Gordon's expenses.
10 Of course, you would expect that all of his
11 lavish expenditures would be listed here, especially 12 all -- in the column for 1991, which would be actual 13 expenses. 14 If he wasn't trying to hide anything you would 15 expect the real expenses to be listed on this form, on 16 this projection, but they are not. 17 Again, what does the whole context, the whole 18 pattern tell you about whether or not this answer is 19 intentionally false? 20 It tells you that he is intentionally trying to 21 hide his expense, not only that he thought he had to list 22 necessary ones. 23 Now, how else do you know that this theory that 24 Mr. Trabulus has about necessary expenses is wrong? 25 Well, for one, Mr. Trabulus is not even

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1 consistent in his theory, because his argument is 2 apparently that Mr. Gordon -- 3 MR. TRABULUS: Objection as to my argument, your
4 Honor.
5 THE COURT: Overruled.
6 MR. WHITE: Mr. Trabulus' argument is apparently
7 that Mr. Gordon didn't list his true expenses, just the
ones that are necessary. So, therefore, he didn't list it

9 if he spent money on things that were not strictly
10 necessary, like all the money he spent on expensive
11 clothing and what not. 12 Remember at one point Mr. Trabulus was 13 questioning a witness, and he suggested that Mr. Gordon's 14 Armani suits, and his custom-made suits, and his cashmere 15 overcoats were necessary expenses because he was an 16 executive, and he had to look good when he met with 17 important Who's Who members. Do you remember all that? 18 I am sure you recall it. And if you remember, 19 that's when on redirect I was pointing out that Mr. Gordon 20 was spending money on $35 a pair of underwear, and I don't 21 think you impressed important Who's Who members with your 22 underwear, no matter how fancy it is. But I don't know, I 23 am just a regular government employee. Maybe I don't 24 attend the same kind of top level executive meetings as

25 Mr. Gordon.

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1 But Mr. Trabulus' point was that his designer 2 suits and fancy clothes were necessary to his job. 3 They can't have it both ways. If it is
4 supposedly necessary, it should be listed, even according
5 to Mr. Trabulus' theory.
6 How else do you know that Mr. Gordon was
7 intentionally trying to give the IRS a false picture of
his expenses?
9 Well, if he is really spending a lot of money and
10 makes no bones about it, that he has plenty of money to
11 spend, and this is just the bear necessities, why does he 12 write this at the bottom: After taxes there is a 13 substantial deficit? 14 He is saying, here is the money I make. And here 15 is the money I pay out. On top of this I have to pay 16 taxes, for that particular year, and not the back taxes. 17 And after taxes there is a substantial deficit. 18 He is not saying I have plenty of money left 19 after taxes, and I just list the necessary expenses here, 20 I am living great. 21 No, he says there is a substantial deficit. He 22 is trying to tell the IRS I can't barely make ends meet. 23 I am almost in the poor house is what he is saying. 24 Now, you will remember that Mr. Reffsin testified 25 that the IRS only wants to know what your necessary

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1 expenses are. 2 Remember that I gave him a few days ago an 3 example of someone who lived in a mansion and paid rent of
4 $20,000 a month, when only $2,000 a month was reasonable
5 and necessary. And he said that that person would only
6 have to list what is necessary, 2,000 a month.
7 And I asked him, and the answer was so amazing, I
had to write it down.
9 I asked him:
10 Question: Are you saying if a taxpayer is
11 squandering $18,000 a month on unnecessary luxuries, the 12 IRS doesn't want to know anything about it? 13 Do you remember what Mr. Reffsin's answer was? 14 Quote, no. They have no desire to know, unquote. 15 Think about that for a minute. Use your common 16 sense. Do you really think that's the way the IRS 17 operates? You owe them three and a half million dollars, 18 you are wasting tens of thousands of dollars a month that 19 you could be using to pay them back, and they don't care? 20 Does that really sound like the IRS we all know, they 21 don't care? They have no desire to know? 22 Now, what else does Mr. Gordon not disclose on 23 this form? 24 Well, he doesn't disclose the fact that he is 25 getting all this compensation from Who's Who Worldwide by

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1 means of them paying his personal expenses. 2 Now, you know that these are not really loans 3 like he is calling them, because he never really intended
4 to pay them back. You know that from the evidence.
5 A little later I will go through the numerous
6 ways you know that.
7 For now, let's humor him and let's assume that
they are loans.
9 Even if they are loans, they should be listed on
10 this form, box 28, other liabilities. He listed a lot of
11 debts he has. If he really owes that money it should be 12 listed there. It is a liability, something he has to pay 13 back, money he owes to someone else. 14 Why aren't they listed on page 3 under the 15 liabilities? He lists a lot of other debts he owes there. 16 By this time he owes Who's Who Worldwide about 17 $160,000. Why isn't it listed there? 18 Think about it for a minute. If these are 19 genuine loans and he really thought he would have to pay 20 them back, he has every incentive to put it on the form. 21 Keep in mind that the IRS is trying to determine what his 22 assets and income are, and how much he owes to other 23 people. 24 If he disclosed that in addition to those loans 25 he owed even more to his company, in theory it would show

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1 that he was in even worse financial hole when this 2 existed, he was in the deeper hole than this form says, in 3 addition to everything listed, he owes another 160,000.
4 Think about it. The worse his financial position, the
5 more in debt supposedly, the less IRS will require him to
6 pay. So the real incentive was to list those loans if the
7 real incentive was to pay them back.
It was suggested to you that Mr. Gordon didn't
9 lists the loans because he would eventually get paid
10 enough to pay the loans in compensation. In other words,
11 the money owed him by Who's Who Worldwide would be equal 12 to what he borrowed and one day that debt would be 13 cancelled out. 14 That theory doesn't make any sense, however. If 15 he was expecting to receive five or six or seven hundred 16 thousand dollars some day from Who's Who, the IRS should 17 have been told about it. Under that collateral agreement 18 the government comes first. They are first in line. They 19 are entitled to half of everything over 50,000 that he 20 makes. 21 And if he is expecting some big pay day in the 22 future, then the IRS is entitled to some of that. He 23 can't unilaterally decide when he gets that money sometime 24 in the future, that the one debt of all the ones he has 25 that he is going to pay is the one to his own company,

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1 basically paying himself back. 2 How else do you know he is trying to hide these 3 supposed loans from the IRS rather than just innocently
4 thinking he doesn't have to report them?
5 Well, use your common sense. Put yourself in
6 Mr. Gordon's shoes for a minute, look for a motive.
7 If he knows if he tells the IRS he is in a
position to borrow hundreds of thousands of dollars from
9 his company, they will say, you should buy some back to
10 pay back the government. They will say if you can borrow
11 money to buy Armani coats, fur coats, suits, jewelry, you 12 can borrow some to pay us back. 13 How else do you know all this? Look at the 14 context. Look at what happens when the IRS is asking for 15 more information. 16 You heard from Mr. Rosenblatt, the government's 17 expert witness about the transfers into Mr. Gordon's 18 account in July of '93, the one supposedly for his son's 19 funeral expenses. We discussed that before. 20 Again, when Gagliardi asked about them, does 21 Mr. Gordon say, well, those are loans to me from my 22 corporation. But, don't worry, eventually I expect the 23 company will owe me so much in compensation, it will 24 eventually cancel out my debt. Does he say anything 25 approaching that?

Summation - White

1 MR. TRABULUS: Objection. There is no evidence 2 of any conversation between Gagliardi and Mr. Gordon. 3 THE COURT: It is up to the jury.
4 If anything Mr. White says conflicts with your
5 recollection of the evidence, you use your own
6 recollection. That is true with all the lawyers. They
7 are going to tell you what their view of what the evidence
is. If it doesn't coincide with your view, disregard all
9 of that. You use your own recollection of the evidence.
10 I can't see anybody with all these charts here,
11 but I think they all heard me. 12 MR. WHITE: What happens when he makes up that 13 request? He makes up the bogus note. There is not just 14 one bogus note, by the way, but there are two. Gagliardi 15 asked about unusual deposits in October of 1993, and the 16 answer to that is another bogus note, this one from 17 Madeline Middlemark who testified, she didn't think she 18 owed him the money. She wasn't sure but doesn't think she 19 did. And she knew she had not seen this note before. 20 Again, what does that tell you about his intent? 21 His state of mind? Does he innocently think he doesn't 22 have to disclose this on the form, or is he intentionally 23 concealing it from the IRS. 24 When you look at this Form 433, don't look at 25 each of the four statements in isolation. Look at it in

Summation - White

1 context in light of all the facts and circumstances. Look 2 at the specific areas that are false. 3 His American Express card. His true income and
4 expenses. His so-called loans and his ownership of Who's
5 Who. All are things, if disclosed would expose his
6 extravagant lifestyle. Do you think it is a coincidence
7 that those things were left off? Do you think it happened
to work out that way by chance because he didn't
9 understand the questions or didn't feel he had to list
10 something?
11 Now, just stop and think for a minute about how 12 he was living. From reading this 433, you would think he 13 couldn't even make ends meet. But he is living like a 14 king, according to the evidence. He is Mr. Armani suits. 15 He is Mr. BMW. He is Mr. Tiffany's. But you wouldn't 16 know that from looking at this form 433. 17 He is Mr. $7,000 overcoat, Mr. $35 a pair 18 underwear, Mr. $16,000 watch, Mr. Palm Beach vacation. 19 You would never know that from looking at these forms. 20 He is Mr. Mercedes Benz, Mr. Million dollar 21 condo, Mr. Persian rugs, Mr. Jacuzzi, Mr. Manhattan 22 penthouse. 23 You would never know that by looking at these 24 forms. 25 One more. He is Mr. $50,000 European vacation,

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1 Mr. Fur coat, Mr. Custom-made designer clothes, 2 Mr. Four-star restaurants. But you would never know it 3 from looking at these forms, because he didn't want the
4 IRS to know.
5 Given his motive to hide his income so he
6 wouldn't have to pay it back, do you really think it was
7 just a coincidence that they never were disclosed to the
9 What happens next after this is submitted?
10 Well, you heard Ms. Peters say that based on his
11 poor financial picture she agreed to let him pay back just 12 $100 a month to satisfy his liability. Remember, she said 13 that Gordon told her he had been living in his car. 14 The agreement he signed was to pay back $100 a 15 month. 16 Now, that was signed eight days after his form 17 433 was submitted in September of 1991. 18 Again, if you look at the American Express 19 records and other documents, you will see that in the time 20 period right before or right after he signed this 21 agreement, he went on a wild spending spree. It is almost 22 as if after pulling the wool over the government's eyes, 23 he goes out and celebrates with a luxury shopping spree. 24 Keep in mind the IRS determined based on the 25 information he has giem the most he can pay is

Summation - White

1 $1,200 a year. But in the three weeks immediately 2 preceding before he signs the installment agreement, he 3 spends $6,000 on designer clothes. He spends over $7,800
4 in a one-month period from mid-September to mid-October
5 1991. It is enough to pay his $100 a month payment for
6 the next six and a half years.
7 Do you really think it was just an honest
9 What happens next?
10 November 1991, Gordon signs that collateral
11 agreement, and that's the one, again, that we talked about 12 before, that makes his income subject to this sliding 13 scale. And also the corporation's income. 14 He has this huge incentive now to hide his 15 income. He has three and a half million reasons to 16 conceal his true income and lifestyle. 17 Now, from late '91 Mr. Gordon is paying the IRS 18 the $100 a month he is owing them under the installment 19 agreement. But how he is paying tells a lot about his 20 intent. 21 Instead of having Who's Who write a check to the 22 IRS each month just like it is doing with all the other 23 monthly payments, he writes a company check to cash. Then 24 he has his trusted employee, Liz Sautter, the woman 25 referred to repeatedly here as his right-hand person, go

Summation - White

1 down to the bank and cash the checks and get money 2 orders. That's what Maria Gaspar told you. 3 Agent Rosenblatt when he was here showed you the
4 checking records with respect to those payments.
5 Why do this? The IRS takes checks, personal,
6 corporate, whatever you want. If you want to give them
7 money they are taking it. So why create the extra work
and the hassle of sending someone down every month to get
9 money orders when you don't really need them.
10 It is because he doesn't want the IRS to see that
11 he has his company paying his taxes for him. 12 Remember, he told Robbie Peters that he was just 13 the sales manager at Who's Who and he wasn't the owner. 14 If he sent in his personal payments by corporate 15 check, they might start asking questions like, why is your 16 company paying the tax bill? And those $100 payments are 17 not the only example of that. 18 Remember Government's Exhibit 797, a note from 19 the files of Who's Who that came from Mr. Reffsin's firm 20 addressed to Liz, presumably, Liz Sautter. And it is 21 dated June of '91. And they are forwarding Mister -- 22 Mr. Reffsin's firm are forwarded Mr. Gordon's returns they 23 prepared for him to send to the IRS. This is in -- for 24 1990, and taking place in June of 1991. 25 The note says to Liz Sautter, that since

Summation - White

1 Mr. Gordon has no personal checking account, I suggest you 2 get money orders to pay the tax. Sending a Who's Who 3 check isn't a good idea.
4 Why isn't it a good idea?
5 Because then the IRS might start asking
6 questions.
7 Now, what does that tell you about Mr. Gordon's
and Mr. Reffsin's intent.

9 What happens next?
10 You see an interesting thing when you look at the
11 Who's Who 1991 and 1992 tax returns. The collateral 12 agreement that requires him and his corporations to pay on 13 a sliding scale. It is signed in late '91. The '91 14 returns are signed mid-'92. Mr. Reffsin signs those as 15 the preparer. 16 When he does that he puts the correct ownership 17 figure on that. He says Mr. Gordon owned 75 percent of 18 the company. And that's what the Grossmans told you, too. 19 If you look at the Who's Who returns after that, 20 all of a sudden he owns nothing. It says he owns none of 21 Who's Who Worldwide. The '92 return, filed in '93, all of 22 a sudden Mr. Gordon owns zero and the Grossmans own 100, 23 the '93 return filed in '94, shows the same thing. 24 Again, do you think that's a big coincidence? A 25 few months after the collateral agreement makes his income

Summation - White

1 subject to this sliding scale, all of a sudden, I don't 2 own anything. 3 Keep in mind by that time Who's Who Worldwide is
4 really starting to take off. They are making a lot of
5 money.
6 What happens next?
7 By the end of '91, Mr. Gordon has had Who's Who
pay for about $145,000 of his personal expenses in that
9 year. In '92, the company pays another $237,000 in
10 personal expenses.
11 By the way, you may say, how do you know that 12 these are Mr. Gordon's personal expenses? We tossed that 13 term around a lot. You may say who says they are his 14 personal expenses? 15 The answer is Mr. Reffsin and Mr. Gordon say that 16 in the books of Who's Who Worldwide. Because they put it 17 in Mr. Gordon's loan account. They acknowledge that it is 18 personal and not business. That's not the government's 19 position, it is how Mr. Gordon and Mr. Reffsin 20 characterize it. They were the ones who decide that they 21 were his personal expenses. 22 In addition to paying his expenses like his rent 23 and everything, Gordon decides to have his corporations 24 buy him a condo in late '92 or early '93. 25 You heard around that time Mr. Gordon bought the

Summation - White

1 Manhasset condo at 200 Hummingbird Road for $600,000. 2 You heard from Ms. Callahan, the manager of the 3 development, telling you what a beautiful place it is,
4 with pool and tennis courts and everything else.
5 But you heard that the $600,000 condominium, it
6 just wasn't fancy enough for Mr. Gordon. It just wouldn't
7 do.
So, he has his corporation spend another half a
9 million dollars renovating it and furnishing it.
10 You heard from Matchless Construction,
11 Mr. Dukoff, if you remember him, about the work he did on 12 the condo. He got paid around $224,000 in work. He told 13 you about the marble and granite floors and countertops 14 they had. $34,000 kitchen cabinets and all those other 15 stories about how lavish they were. 16 You heard from Ms. Ruggieri who made the 17 custom-made furniture there for $43,000. 18 You heard from Mr. Gordon's own sister, Joyce 19 Grossman who was an interior decorator also who paid a lot 20 of vendors and furniture from what she got, and she was 21 paid over $150,000. 22 You heard he didn't put the condo in his own 23 name, he created another company, PVI, and Who's Who 24 Worldwide transferred all the expenditures to PVI who paid 25 for all the work on the condo.

Summation - White

1 You heard PVI is a dummy corporation, no 2 employees, and just exists on paper to own the condo. 3 He owns the IRS three and a half million dollars,
4 he is having his company pay the personal expenses, do you
5 think it is a coincidence he doesn't want the condo in his
6 name? It just fits the same pattern of deception you
7 heard before.
You heard Mr. Gordon gave testimony that the
9 condo was used for business meetings. It was available
10 for Who's Who Worldwide members who were in New York from
11 out of town. 12 Let's look at that, is that really true? 13 The best response is Mr. Reffsin's own words. He 14 says that that is bullshit, to quote him. That's what he 15 told Agent Jordan, that's what Mr. Gordon was telling him 16 about using the condo for business, that's bullshit. 17 That's not the government saying that. It is 18 Mr. Reffsin, Mr. Gordon's confidant, his long time 19 accountant, who reviewed all these financial transactions, 20 he says it is bullshit, right from his own mouth. 21 How else do you know that that is true? 22 Well, look at all the solicitation letters and 23 all the pitch sheets of Who's Who Worldwide and Sterling 24 Who's Who. They list a lot of so-called benefits, and I 25 am sure when the defense attorneys get up you will hear a

Summation - White

1 lot about that. But they describe every possible benefit 2 of being a member. 3 But never, not once in all the hundreds of pitch
4 sheets and solicitation letters between '92 and '95 that
5 are in evidence does it even mention that members could

6 stay at the condo.
7 Think about it. If they really could stay
there? If that's really why Mr. Gordon got this
9 condominium, don't you think it would be in the pitch
10 sheets and solicitation letters? Wouldn't they say, oh,
11 by the way, as a member you can stay at our lavishly 12 furnished luxury condo, complete with jacuzzi, tennis 13 court, swimming pool. Isn't it a great selling point if 14 members could really stay there? 15 No, not a single mention anywhere, no place, with 16 respect to customers being allowed to use the condo. 17 There is not a single mention of members using 18 the condo anywhere in all the hours and hours of tape 19 recordings of sales calls in evidence. There is not a 20 single, solitary mention of it anywhere. 21 What does it tell you? It tells you the condo 22 was not for members. It was for Mr. Gordon himself. 23 It tells you that Mr. Reffsin was right when he 24 says that that claim was bullshit. 25 How else do you know it is so?

Summation - White

1 The bogus logs submitted to the bankruptcy court 2 with respect to the condominium. 3 Again, I will discuss some more in depth later,
4 but what did they tell you about it?
5 The Court in effect said, if you are really using
6 it for business, prove it. Give me the logs.
7 Instead they order Maria Gaspar to make up phony
9 When they are gie opportunity to show that
10 the condo is used for business purposes, they lie and
11 submit phony documents. Do you think they would do that 12 if the condo was really used for business? Of course not. 13 Now, you heard that Mr. Gordon is charged with 14 money laundering. Now, what is that? 15 Well, the judge is going to give you legal 16 instructions and you should, of course follow them. But 17 let me just try to explain it in layman's terms. 18 Money laundering is when you engage in financial 19 transactions, a crime, in this case mail fraud. You have 20 to know it is from the proceeds of a crime. And it has to 21 be for the purpose of concealing the source, the ownership 22 of that money. 23 So, here you know he is taking money from Who's 24 Who Worldwide. That's the proceeds of the mail fraud. 25 You will remember about the last thing that the

Summation - White

1 government -- the last piece of evidence the government 2 put in was a stipulation about where certain credit card 3 charges were credited. When customers use an American
4 Express card, a Visa card, it is credit to a particular
5 bank, when you look at the bank statement, it goes from
6 there to Who's Who Worldwide, and then to PVI. And they
7 are transferring it to PVI to furnish and purchase this
condo. And the indictment charges him with doing all that
9 to conceal his ownership and control of his money.
10 He doesn't want the IRS to see, to know that he
11 controls all this money. 12 Take a look at this. It is a chart that Agent 13 Rosenblatt prepared summarizing all these financial 14 transactions, he did one a year. This is in 1993. The 15 condo was purchased around this time. 16 Look at the money he is spending going out of 17 Who's Who Worldwide to Publishing Ventures, and they are 18 spending all this money. These are the transactions that 19 he is charged within that money laundering count. 20 All these transactions that Publishing Ventures 21 is using, where they are using this money, to purchase it, 22 to make mortgage payments, to pay the taxes, to make all 23 the improvements like Matchless Construction, furnishings, 24 the condo fees and various other things. 25 Now, here is 1994. The money is coming in from a

Summation - White

1 variety of sources to Publishing Ventures, and they are 2 dispersing it again, $185,000 worth. 3 Mr. Trabulus made a point in questioning certain
4 witnesses about the fact that Mr. Gordon paid rent with
5 respect to this condominium. So let's look at that for a
6 moment.
7 First of all, why is he paying rent? Ask
yourself that question.
9 The answer is simple. He starts paying rent in
10 early 1993 because he knows he has to submit an offer in
11 compromise in a few months, and he has to show that he is 12 paying rent. 13 When they ask him about his expenses, he has to 14 show he is paying rent. He can't say he owns a home. He 15 can't say my corporation owns it, and they let me live 16 there free. That would blow the whole plan. So he 17 strokes out a rent check to PVI so they can say he is 18 paying rent. 19 If you take a real look, is he really paying 20 rent? Is he digging into his own pockets to pay the 21 rent? 22 Agent Rosenblatt showed you if you trace the flow 23 of money from Mr. Gordon and his corporations, you will 24 see he is just shifting money around from one corporation 25 to another to make it look like he is paying rent.

Summation - White

1 You see, here from Registry Publishing he gets 2 $12,500, from Who's Who he gets 5,000, and that's what he 3 is paying Publishing Ventures. 17,500. It is a big
4 circle. He is moving it around so there is a paper trail
5 which looks like he is paying rent.
6 How else do you know this is a big charade and
7 that Mr. Gordon really owns this condo?
A witness testified, named Stanley Chase. Of all
9 the witnesses you probably don't remember him because he
10 was here for only five minutes. But Mr. Chase rented this
11 condominium from Mr. Gordon after Mr. Gordon moved out, I 12 think it was around '95. Mr. Chase was paying $5,250 in 13 rent, not 2,000. Mr. Gordon is not even paying a decent 14 rent. At least he is jacking the rent up more than twice 15 as much when Mr. Chase moves in. 16 What happened to that money? 17 Well, the check stubs from Publishing Ventures 18 are in evidence. Mr. Chase sends in a check for 5250 and 19 it goes back out to Mr. Gordon. Mr. Gordon is the 20 landlord and collecting the rent. 21 What happened next? We are up to August of '93, 22 Mr. Gordon and Mr. Reffsin submit the offer in compromise, 23 the offer to settle with the IRS. The offer is Mr. Gordon 24 will give them 150,000 over three years to settle this 25 entire three and a half million dollar liability.

Summation - White

1 Now, the offer they submit is Exhibit 420. 2 Now, Mr. Reffsin says in that cover letter that 3 Mr. Gordon talked to various relatives, and that the
4 offer -- they are going to loan him some money. And the
5 offer presented is based on a sum of money he feels he can
6 borrow.
7 Look at that for a minute. They are saying he is
going to borrow this money from relatives, and that's all
9 he can borrow. And that's all false.

10 Even if you accept his story, that he is getting
11 loans from Who's Who Worldwide, you know he can borrow a 12 lot more than 150,000 from the corporation. By this point 13 he borrowed hundreds of thousands of dollars. 14 If he can borrow money to buy Armani suits and 15 fur coats and European vacations, he can borrow some of it 16 to pay back the IRS. 17 He doesn't want the IRS to find out about that 18 money, because then they may take away all his toys, his 19 Mercedes, his suits, his jewelry and his vacation. 20 The letter even says that he cannot even pay his 21 back alimony to his former wife. But according to that 22 433 form he submits, he owes $60,000 in alimony. If he 23 wanted to he could borrow from Who's Who to pay that like 24 he can borrow to pay the IRS. It is part of a pattern to 25 show that he can't pay his expenses, when you know that he

Summation - White

1 can. 2 Now, Mr. Reffsin includes a projection in there 3 which we talked about before. This document puts the lie
4 to a lot of their phony arguments at the trial. It
5 exposes them as just excuses, and are made up after the
6 fact to justify their lies.
7 Now, for example, Mr. Reffsin when he testifies,
he told you that in late '92, he told Mr. Gordon, listen,
9 you got to pay off your loans to Who's Who by 1994, and
10 that if he didn't, Mr. Reffsin was going to declare them
11 as income and he would have to pay taxes on them. But he 12 said that one way or another this whole loan situation was 13 going to be resolved. He was going to take it as income 14 or pay it back by 1994. 15 To do that he would have to take a substantial 16 amount of income and then turn a round and pay off his loan 17 to the company. 18 If he was ever going to pay off the loan, which 19 is hundreds of thousands of dollars, he would have to make 20 that much in income. 21 If he expected he would be making all that money, 22 why isn't it on this projection? Because he doesn't want 23 to tell them, hey, I am expecting a big pay day. Then 24 they would say, we want a piece of that. 25 Another bogus argument disproved by this form is

Summation - White

1 Dr. Grossman loaned Mr. Gordon 235,000 to reduce his loan 2 account in early 1993. 3 You heard Dr. Grossman testify that Mr. Gordon
4 didn't say anything to him about it being a loan, only
5 that the company needed the money back to pay for the
6 printing of the directories.
7 Well, if this really was a loan, then, again, why
isn't it listed here as a debt that Mr. Gordon owes.
9 According to them he owes Dr. Grossman $235,000, you can
10 read this until you are blue in the face, and it is not
11 listed there. It would only help him to list it if it 12 really were a debt he owed. Because, again, it would make 13 him look like he was even deeper in debt. 14 But it is not listed, because it is not really a 15 loan. He has no intention of paying it back. 16 Dr. Grossman doesn't expect it back. He doesn't know that 17 it is a loan from Mr. Gordon. 18 The circumstances suggest he just sent the money 19 out to Dr. Grossman and got it back a week or two later so 20 he can say that it was a loan from Dr. Grossman. 21 Again look at the form 433 submitted with this 22 offer in compromise. 23 This one is July of 1993, and like the other one, 24 it is not only part of this conspiracy in this tax evasion 25 scheme, but it is also a separate charge of filing a false

Summation - White

1 collection information statement. 2 Now, again, I will not go into all the same 3 detail, but the same things are false about it.
4 Box 18, securities, he writes "none."
5 You know he owns 75 percent of the company. By
6 this time the company is probably worth three-quarters of
7 a million dollars. You look at the tax returns.
He also owns PVI, which is the owner by this
9 point of a million dollar condo. And that's not listed.
10 Again, bank charge cards, he writes none.
11 No other Amex cards listed in box 28 either, 12 although he has got it and he is spending up a storm. 13 Page 4, income. Again, the payment of his 14 personal expenses are not listed. 15 Even if you consider it a loan, why isn't it back 16 over here under other liability? It is not. 17 Again, the expenses, you know that those expenses 18 bear absolutely no relation to what he is actually 19 spending. 20 As I said before, you have to look at these forms 21 in context. Don't look at each alleged false statement in 22 isolation. Look at the big picture. 23 Again, all the things that are not disclosed on 24 this form have a common theme, that if you disclosed them 25 they would expose his lifestyle and income.

Summation - White

1 Do you think that that is a big coincidence? 2 THE COURT: Is this a good time to take a break, 3 Mr. White?
4 MR. WHITE: Yes, your Honor.
5 THE COURT: I don't want to interrupt your train
6 of thought.
7 MR. WHITE: It is fine.

8 THE COURT: Members of the jury, we will take a
9 ten-minute recess. Please keep an open mind and please
10 recess yourselves.
11 (Whereupon, at this time the jury leaves the 12 courtroom.) 13 THE COURT: I assume -- I have to tell you 14 something so stick around, please. 15 I assume you are keeping track of the time, 16 Mr. White. 17 MR. WHITE: I am. 18 THE COURT: According to my unofficial time 19 keeping, we started at 9:42 a.m. 20 MR. WHITE: That's correct, your Honor. 21 THE COURT: Good. I am glad you are watching 22 me. 23 MR. WHITE: I have my timekeeper working on it. 24 THE COURT: All right. 25 I have two things to state.


1 One is that I noticed during the summation of the 2 prosecutor that Ms. Haley left the courtroom for about

3 five minutes.
4 Is that correct, Mr. Geduldig?
5 MR. GEDULDIG: Yes, Judge, it is.
6 THE COURT: Did she waive her appearance during
7 that time.
MR. GEDULDIG: She does.
9 THE COURT: She knows she has a right to be here,
10 especially during summations.
11 MR. GEDULDIG: Yes, Judge, she does. 12 THE COURT: And it is not wise for her to leave 13 during summations unless it is some emergency. 14 Does she understand that? 15 MR. GEDULDIG: Yes, she does understand, Judge. 16 THE COURT: And she waives her appearance during 17 that time? 18 MR. GEDULDIG: Yes, she does. 19 THE COURT: Have a seat. 20 I have reviewed the cases again. 21 I have reviewed the cases again on Starnas and 22 the more recent case. 23 And I get from this, notwithstanding my feelings 24 about the Starnas case, that I have to go along with the

25 option given to the defendant.


1 Another reason why I am doing that is just by 2 looking at it again more carefully, it just makes sense. 3 And the reason that it makes sense is that I was going to
4 charge the jury that they would have to find the defendant
5 Gordon not guilty on Count 57 before they could go to the
6 lesser included offenses.
7 What does the defendant need the lesser included
offenses under those circumstances? It just doesn't make
9 sense.
10 So, I have to reverse myself. And I am doing it
11 before Mr. White got to that portion. 12 I am going to charge, Mr. Trabulus, as you have 13 recommended that the jury either finds the defendant 14 Gordon not guilty on Count 57, or after a reasonable 15 inquiry, cannot reach a verdict. And then they are to go

16 to the lesser included offenses. 17 We will take a ten-minute recess.
18 19 (Whereupon, a recess is taken.) 20 21 22 23 24 25


1 THE COURT: Bring everybody in, please. 2 MR. WHITE: Your Honor, are we going straight 3 through until I finish?
4 THE COURT: We will take lunch at about 1:00
5 o'clock or thereabouts.
6 (Whereupon, the jury at this time entered the
7 courtroom.)
THE COURT: In order for us to try to conclude
9 the first summation at least, we are going to have lunch
10 at 1:00 o'clock or thereabouts. We ordered it for that
11 time. So this way we will permit Mr. White to conclude 12 his summation in chief. 13 You may proceed. 14 MR. WHITE: Thank you, your Honor. 15 Let's look and see what happens after the offer 16 in compromise is submitted. I will move a little more 17 quickly because some of these things we have already 18 talked about. 19 You know Mr. Gagliardi already asked Mr. Gordon 20 and Mr. Reffsin for more information. The first thing he 21 does is November of 1993, he writes this letter. It asks 22 for a whole bunch of things. Three things in particular 23 you need to focus on. 24 Number three, he asks for all the bank statements 25 and checks for which Mr. Gordon is a signator, paragraph

Summation - White

1 three. 2 Paragraph six, verification of all monthly 3 payments if not paid by monthly check.
4 Nine, motor vehicle registration, title
5 certificates and/or leasing agreements for vehicles you
6 own and/or operate.
7 Now, you know that virtually none of that was
given to Mr. Gagliardi. You heard in response to number
9 three, all he got was Mr. Gordon's personal bank
10 statements, not the checks of Who's Who, PVI, any other
11 corporation. With respect to number six he got nothing 12 although the company is paying his American Express bills. 13 With respect to number nine, although Mr. Gordon 14 is tooling around in a BMW at this time and the company is 15 paying the lease, he gets nothing. 16 Now, what happens after that? When Gagliardi 17 does gets the personal bank statement, that's when he sees 18 the abnormal deposits and they have sets for another 19 number of requests and he asks to explain the abnormal 20 deposits and that's when he gets the two phony notes with 21 respect to Joyce Grossman and Madeline Middlemark. 22 Now, so what happens next? 23 Let's go to February of 1994. Now you find out 24 that Sterling is renting a penthouse apartment on the east 25 side of Manhattan. They start in February of 1994 for

Summation - White

1 $8,000 a month. 2 Apparently living in this million dollar luxury 3 condo in Manhasset is too confining for Mr. Gordon. He
4 needs a nice pad in New York City. Not any apartment. It
5 has to be the best for Mr. Gordon, in one of those
6 penthouse apartments, with a doorman and concierge, and I
7 can barely pronounce it, so fancy.
You heard Mr. McDonald, the building manager tell
9 that Mr. Gordon's apartment covers the entire floor like
10 you see in the movies with an elevator opening right up to
11 the living room. 12 He said the apartment was sold for 1.25 million 13 dollars soon after Mr. Gordon left. 14 How do you know Mr. Gordon lived there? 15 You know it from a variety of sources, the 16 building manager came in and testified, the building 17 manager saw Mr. Gordon going in to work in the morning, 18 and he complained to him about the heat in the study. The 19 lease was signed by Who's Who Worldwide. And it says only 20 for residential use and no other purpose. If the tenant 21 is a corporation, the apartment can only be occupied by 22 designated occupant, the person listed on the lease as 23 occupant, and that's Mr. Gordon. 24 Think about it. If the lease is really for out 25 of town members to stay in, and if that's the original

Summation - White

1 reason as to why the apartment was obtained, why does he 2 sign that lease that says that Mr. Gordon, and only 3 Mr. Gordon can live there? When the landlord gives him
4 the lease, does he say, this is unacceptable, I can't sign
5 this? The whole reason I am here to rent this place is
6 because I want out of town members staying here.
7 He signs on the dotted line because he knows he
is living there.
9 How else do you know he is living there?
10 Early in 1996 you heard Mr. Mendelsohn, a defense
11 witness coming in. 12 Mr. Mendelsohn says the trustee came in and 13 locked him out, if the company is paying for the penthouse 14 we should be in charge for it. 15 What does Mr. Gordon do? He changes his tune 16 pretty fast. Before he was saying it is all for 17 business. Now that they got his stuff in there and he is 18 locked out. Hey, man, now it is personal. You got my 19 stuff and I want it back. 20 So, he writes a letter to Mr. Ackerman demanding 21 that he get his personal stuff back. He asks Mr. Ackerman 22 to sue Mr. Mendelsohn and others for ten million dollars 23 for taking his personal stuff. 24 Well, Mr. Ackerman won't do it. But eventually 25 you know that another lawyer did file the complaint, and

Summation - White

1 that complaint is in evidence. 2 Mr. Gordon admits there that he used the condo as 3 his residence. That he stayed there with his child. That
4 he had numerous personal items there.
5 Also, as I said before, the condo is -- the
6 penthouse is not listed on any pitch sheets or anything.
7 You know that if members really could stay there that it
would be.
9 Now, what happens next?
10 There is a big problem. In March of 1994, March
11 8th, 1994, is when you heard that Marquis Who's Who wins 12 this lawsuit against Who's Who Worldwide for 1.6 million 13 dollars. 14 Who's Who can't pay that so they have to declare
15 bankruptcy. And they file the bankruptcy petition March 16 21st, 1994. 17 Now, this upsets the apple cart that Mr. Gordon 18 and Mr. Reffsin have set up. The whole set up is that the 19 company is paying his personal expenses. 20 Now, in bankruptcy you have to have financial 21 disclosure. He has no choice. He can't pay the 1.6 22 million dollars to read, so he has to be into bankruptcy. 23 What does he do? He transfers, he transfers all 24 sorts of money out of Who's Who Worldwide, right after 25 that judgment. He knows he can't continue to be paying

Summation - White

1 his personal expense out of there. So he gets that money 2 out of Who's Who as fast as he can say it. It goes to all 3 those other companies. He doesn't want the gravy train to
4 end. He filters it out to all these other corporations
5 which ends up paying all his personal expenses.
6 THE COURT: Can all the jurors see those charts?
7 If not I would suggest you move the lectern out of the
9 Anybody not see it, raise your hand?
10 MR. WHITE: A suggestion as to what is the best
11 spot to see it? 12 THE COURT: Move the lectern back a little bit to 13 give them more vision. You don't have to be that close. 14 MR. WHITE: Okay? 15 THE COURT: That's good. 16 MR. WHITE: Now I am going to quit. 17 THE COURT: That gives you an extra minute. 18 Do you have it down, 60 seconds? 19 MR. WHITE: Good, because I can use it. 20 Again, Mr. Gordon's own friend, Mr. Ackerman 21 says, why did you do all those transactions? He asked 22 why? 23 He said because it was his own personal tax 24 situation. It doesn't get clearer than that. It is right 25 from Mr. Gordon's own mouth.

Summation - White

1 Now, they have a problem though. This bankruptcy 2 has interrupted their cozy little arrangement. In the 3 bankruptcy court they don't want to say that Mr. Gordon
4 owns 75 percent of the company. So they have
5 Mr. Reffsin's friend, Steven Adler, a lawyer, preparing
6 the backdated documents showing that the Grossmans always
7 owned 100 percent of the corporation, which is wrong.
You have the documents, Exhibit 671, the fax from
9 Mr. Adler to Mr. Reffsin.
10 Think about it for a minute, and let me back up.
11 The documents he uses and that he creates here are 12 completely bogus. You heard Ms. Grossman coming in here 13 saying I own 75 percent and I authorize my brother, Bruce 14 Gordon to tell other people he owns my shares. 15 She said it is not the case. The information is 16 just inaccurate. 17 Why did they tell Mr. Adler to prepare those 18 documents? Why did they use Mr. Adler? 19 You heard they had a respected bankruptcy 20 attorney on retainer, and you heard the legal bills he 21 charges, goes to the bankruptcy court. They don't want 22 all that showing up on a legal bill, creation of phony 23 documents, $1,500, so they have Mr. Adler do it. And 24 Mr. Reffsin pays his fee. 25 He is doing work for Who's Who, but Mr. Reffsin
Summation - White

1 is stroking out the check to him. Does that sound odd to 2 you? Does it sound to you like someone who wants to go 3 and wants to have Mr. Adler do some kind of black bag job
4 and create these phony documents that they can use?
5 Now, you also heard that those blank stock
6 certificates were signed by Dr. Grossman, you remember
7 that? And he said he did this around this time. And he
estimated he signed them around early '94. You know that
9 because if you remember there was an IRS lab expert who
10 came in here and testified that one of these documents
11 that Mr. Adler created was on top of the stock certificate 12 when it was signed, so she knows, and you can tell from 13 the impression as to when it was created. 14 Since you know that this wasn't created until 15 March of 1994, you know they are going back and creating 16 these phony documents. 17 Now, take a look at this letter, here is the 18 letter, Exhibit 582, that Mrs. Grossman says is completely 19 bogus. 20 Now, why does it say this? 21 Look at the situation that Mr. Gordon is in in 22 March of 1994 when this was created. He knows he 23 testified numerous times under oath previously that he 24 owns 75 percent. And that was before he decided to change 25 his tune. He said that three different times,

Summation - White

1 Exhibits 802, 815 and 804, all are in evidence. 2 He said it three times under oath that he is an 3 owner. But he doesn't want to put on the bankruptcy
4 petition he is the owner. He wants to say the Grossmans
5 are the 100 percent owner.
6 What does he come up with? It is a great plan.
7 He wants to say he owns 100, and he knows he is on record
saying 75. So he has Mr. Adler draft this letter where
9 Joyce says she owns 75, but, Mr. Gordon, you can say to
10 other people that you own my 75. It is the perfect
11 solution to his problem. That way he can say, I am not 12 the owner. But I said it before because I got this letter 13 and Joyce said I can do that. 14 Of course, you know that none of the information 15 in this letter is true as Mrs. Grossman told you. 16 And then you heard that they submitted a 17 bankruptcy petition that says the Grossmans owned 100 18 percent, and Mr. Gordon testified numerous times under 19 oath, Exhibit 799 and 800, both of which are in evidence, 20 where he said falsely that the Grossmans owned 100 21 percent. 22 Now, Mr. Trabulus and also Mr. Reffsin when he 23 testified said that Mr. Gordon was going to pay back his 24 loans until the bankruptcy intervened, that that kind of 25 threw things off, that that somehow made his future income

Summation - White

1 questionable and he couldn't pay it. 2 It is a nice theory, but it doesn't fit with the 3 facts. Look at how he is living after the bankruptcy. He
4 is not living like someone who has future income in
5 jeopardy. He is spending like a maniac. When you look at
6 the money, the American Express receipts and others, he is
7 living more lavishly than he ever did before. He spends
about three times as much in '94, as he does in the year
9 before that. He is not slowing down on his spending. He
10 is speeding up, to borrow a phrase we heard from Judge
11 Spatt during this trial, he is reaching flank speed on his 12 spending. All he has done is he shifted $500,000 out of 13 this bankrupt corporation to the others, and then he is 14 continuing business as usual. 15 Now, it is the summer of 1994 he takes this 16 lavish vacation to Europe that cost $50,000. 17 In the summer of '94, things are heating up in 18 the bankruptcy case. The trustee -- excuse me, the 19 creditors are saying why are we spending money on your 20 personal condo and your penthouse? And they ask the Court 21 to appoint a trustee. 22 They don't want a trustee. That is going to 23 upset things. Because the whole plan is dependent upon 24 Mr. Gordon being in charge of the corporations, and being 25 able to have his corporations pay his expenses. If a

Summation - White

1 trustee comes in then the gravy train is over. 2 So, you heard that the bankruptcy court ordered 3 them to keep logs, and that's August of '94.
4 Now, Mr. Reffsin said that Mr. Gordon didn't want
5 the creditors to have these logs, Reffsin testified that
6 Gordon was ranting and raving about it, and that he didn't
7 want to do it.
Then you hear again, September of '94, there is
9 another one of these 341 Hearings in the bankruptcy court
10 where Mr. Gordon and Mr. Reffsin and Maria Gaspar are
11 present. 12 Now, after this meeting you heard Ms. Gaspar tell 13 you that in the car on the way back, Mr. Reffsin and 14 Mr. Gordon ordered her to create these phony logs. They 15 said it in Mr. Reffsin's car on the way back to the Who's 16 Who Worldwide office. She was told to get a calendar and 17 go and make up the meetings. They gave her phony topics 18 she could use. 19 Now, she said she didn't feel comfortable doing 20 this. And this takes place on the drive back to the 21 office. But then you also heard testimony from Debra 22 Benjamin. She said that around this time Ms. Gaspar came 23 into her office one day, and she was upset. She said she 24 had come from a meeting with Mr. Gordon and Mr. Reffsin, 25 where they asked her to do something.

Summation - White

1 Now, she doesn't prepare the logs right away, 2 Ms. Gaspar. Eventually Reffsin calls her and says, hey, 3 we need them today. So she does them. And Mr. Gordon
4 gives her suggestions about what to put. And they fax it
5 to Mr. Reffsin for his approval. And he says it is okay.
6 She then sends it off to the attorneys, who then produces
7 them to the creditors. Here they are. Here is her
pencilled, handwritten logs. It is Exhibit 643.
9 Now, in addition to being part of this whole
10 conspiracy to conceal Mr. Gordon's income and expenses,
11 they are also charged with obstruction of justice for 12 this. 13 Now, there is no dispute that these logs are 14 completely bogus. Maria Gaspar told you she made them 15 up. And a number of Who's Who employees came in and 16 testified that they never attempted the meetings listed on 17 those logs. 18 It was obviously an attempt to obstruct the 19 bankruptcy proceedings. The bankruptcy court says show us 20 the logs. Put up or shut up. You say you are using it 21 for business use, so show us. 22 What do they do? They fabricate them. 23 Now, the defendants have attacked Maria Gaspar as 24 a liar. And lets look at that for a minute. 25 Now, put yourself in Ms. Gaspar's shoes at the

Summation - White

1 time of these bankruptcy logs. She has absolutely no 2 personal motive to create those phony logs on her own. 3 She is an employee of the company with no financial
4 interest. Why would she care on her own if Who's Who won
5 or lost a motion in the bankruptcy case.
6 There are only two people in the entire world who
7 benefit from the submission of those phony logs. They are
Mr. Gordon and Mr. Reffsin. Mr. Gordon, because it keeps
9 the gravy train flowing. He gets to live in the condo, in
10 the penthouse, it puts off the appointment of the
11 trustee. And Mr. Reffsin, because their secret is not 12 exposed, along with Mr. Gordon he has been telling the IRS 13 that Mr. Gordon is barely scraping by. He doesn't want to 14 admit that there are these two one million dollar 15 apartments for Mr. Gordon's use. 16 How else do you know that Ms. Gaspar is telling 17 the truth? Her testimony is corroborated by Ms. Benjamin 18 who says a few years -- weeks before Ms. Gaspar left, she 19 came into her office saying she was upset. 20 If you look at Debra Benjamin's testimony, it is 21 not just some normal workplace disagreement Ms. Gaspar was 22 having with Gordon or Reffsin. These were the words 23 Ms. Benjamin used to describe Ms. Gaspar at the meeting: 24 Very, very rattled. At the verge of tears, very upset and 25 nervous. She was falling apart. That's what Debra

Summation - White

1 Benjamin said about her. 2 You remember Ms. Benjamin. She was friendlier to 3 the defendants than she was to the government. Yet her
4 testimony corroborates what Gaspar says.
5 You have testimony from two witnesses who
6 according to Debra Benjamin, they have not spoken for two
7 or three years. That meshes perfectly.
How else do you know that they ordered Ms. Gaspar
9 to create the phony logs?
10 Well, you know the condo and the penthouse were
11 not used for business. You know that from all the 12 evidence. They know it wasn't used for business. 13 Mr. Reffsin tells Agent Jordan that it is bullshit they 14 were used for businesses. So if it has to be given to the 15 bankruptcy court it was bogus, and they know that. 16 How else do you know that they were involved in 17 creating it? 18 The records for Mr. Ackerman's law firm indicates 19 that they were both faxed copies of the logs on that day, 20 the same day they were sent to the creditor's attorneys. 21 Do either of them call up and say, wait a minute, 22 Mr. Ackerman, this doesn't look right to me. Gordon is 23 living there. He knows they are not having business 24 meetings there everyday. 25 The logs list Mr. Gordon as attempting meetings

Summation - White

1 at the condo a week before they are produced to him, to 2 the creditors and fax to him. But his Amex records show 3 he is staying at the Beverly Wilshire Hotel and buying
4 suits on Rodeo Drive.
5 Does he say wait a minute, I was in California,
6 and you have me at the condo.
7 Every man says he is a hands on CEO, literally
opening up the mail at the company and deciding how many
9 lead cards go in a stock when they get sorted, writing
10 every single check. Is he the kind of guy who would not
11 notice that the logs were mistaken? 12 And also keep in mind that these guys are the 13 same guys who came up with other bogus documents on other 14 occasions. They are the ones who came up with this phony 15 Joyce Grossman and Madeline Middlemark note. They are the 16 ones who came up with this phony Joyce Grossman letter 17 that Mr. Adler prepared. 18 This is one of their specialties. Instead of 19 having one of those fancy French paintings that Mr. Gordon 20 bought on his summer vacation back in '94 at his office. 21 They might have a big sign saying bogus documents are us? 22 These -- this is one of the ways they get out of jams, 23 they created bogus documents. You know they did it 24 before, and they did it again here. 25 The defendants have suggested that Maria Gaspar

Summation - White

1 is lying, and they really offered a couple of reasons why 2 that may be. 3 First they said, well, she has immunity. But
4 they are forgetting that she voluntarily told agents
5 before she got immunity, that Gordon and Reffsin ordered
6 her to do this. She told them this several times before
7 she got immunity. Her story has been consistent from day
one, according to the questions they have asked her.
9 Stop and think about it. Agents come to her
10 office and she voluntarily tells them what they did. She
11 basically incriminates herself. She confesses. She gets 12 no guarantees, no promises. They ask her questions and 13 she answers. This is not a situation where someone 14 changes their story after they get immunity, or someone 15 will not talk unless they are promised with immunity. You 16 heard she didn't ask for it, that the government suggested 17 to her that she get an attorney and then worked it out 18 with her attorney. 19 Now, he also suggested she has a grudge against 20 Mr. Gordon and Mr. Reffsin. She was hired as a 21 comptroller and really worked as a bookkeeper. 22 With respect to Mr. Reffsin they said he 23 criticized her work as a bookkeeper. 24 Do either of those things sound like a witness 25 who is motivated to try to send an innocent person to

Summation - White

1 jail? Use your common sense. 2 Now, what happens next after these logs? 3 Well, in September of '94, in September of '94,
4 you heard that Mr. Gagliardi asked a question about why
5 Mr. Gordon hadn't paid a certain part of his tax
6 penalties, and then Mr. Reffsin writes back, you will
7 recall, giving him a big sob story about how he just can't
pay it. It totals about $8,000.
9 That is like pocket change to Mr. Gordon. That
10 is like walking around money to him.
11 Mr. Reffsin says, he is going to have to borrow 12 the money that he has offered you, that's 150,000. Where 13 shall he borrow this money? Perhaps he should cease 14 eating. 15 He says that the IRS must be realistic as to the 16 financial hardship being imposed on the taxpayer. 17 Come on, ladies and gent lemen. That's 18 ridiculous. You know that. 19 Now, how brazen, how arrogant do you have to be 20 to say something like that about a guy who is living the 21 way Mr. Gordon is. 22 Now, let me briefly discuss the whole issue about 23 are these loans, or are they income? 24 The key issue is: Did Mr. Gordon intend to pay 25 it back, and you know he never did, and let me tell you

Summation - White

1 why. 2 First, again, there is a pattern. Look at how 3 his whole financial affairs are structured. He doesn't
4 really intend to pay those loans. It is just a convenient
5 way to funnel money to him.
6 Second, why is he lying about the loans? When
7 Gagliardi asked about the abnormal deposits, does he say,
yes, those are loans for my company? No, he creates the
9 phony Jo yce Grossman notes.
10 Why aren't they disclosed on the 433's? He has
11 every incentive to put them because they will only show he 12 is in worse shape that way. 13 Is he spending money like someone concerned about 14 having to pay it back? 15 19 '91 and '94, he spent over $800,000. 16 Mr. Ackerman wrote a letter in the bankruptcy 17 court where after he met with Mr. Gordon and Mr. Reffsin, 18 where they basically said, this is what he said, quote, 19 always assumed that the loans would be set off from his 20 compensation, that he would never actually pay it back 21 because he owed them more than -- they owed him more than 22 he actually owed them. 23 There are no repayments practically. Two 24 repayments you have to focus on, the one where he sends 25 the money to Dr. Grossman, and says I need it back for the

Summation - White

1 printing of the books. We discussed that before. It is 2 ridiculous. 3 There is the repayment of allegedly $20,000. But
4 if you look at where the money is coming from. He is just
5 getting it from another corporation. It is just making a
6 big circle so he can show the bankruptcy court, hey, I am
7 trying to pay back the money.
Now, as part of this overall scheme that
9 Mr. Gordon and Mr. Reffsin are involved in, they are also
10 charged with making false tax returns. All those returns
11 are in evidence and I will not go into all of them. But 12 they all fail to disclose the extra income and 13 compensation that Mr. Gordon received as a result of the 14 company paying his personal expenses. And the summaries, 15 the analyses how they are wrong are also in evidence from 16 Agent Rosenblatt. 17 Mr. Gordon had unreported income in those four 18 years, '91 to '94 of over a million dollars, he owes over 19 $377,000 in taxes. 20 Now, that's the evidence on the tax part of the 21 case. The evidence is overwhelming that there was a 22 willful and deliberate plan by them to evade payments of 23 his taxes and file these false documents with the IRS. 24 You know this isn't just some innocent mistake. 25 It is not a misunderstanding of what has to be disclosed.

Summation - White

1 There are too many lies, too many coincidences to believe 2 that. You know what went on here. 3 Gordon was living like a king, while he and
4 Mr. Reffsin were deliberating telling the IRS that he
5 could barely get by.
6 Okay, now let's discuss the other fraudulent
7 scheme you heard about in this trial, the s cheme to
defraud the customers of Who's Who Worldwide and Sterling.
9 Now, the defendants who are charged with
10 participating in the scheme are all the rest, Mr. Gordon,
11 his two corporations and all the managers and salespeople. 12 They are charged with conspiracy to commit mail 13 fraud and mail fraud. In layman's terms, a conspiracy is 14 simply an agreement by two or more people to do something 15 illegal, in this case defrauding their customers. 16 A scheme to defraud in a nutshell is any trick, 17 plan, to get people's money by false pretenses or by false 18 and misleading statements. The judge will instruct you 19 that the defendants did not have to sit around the table 20 and formally agree to participate in this criminal 21 scheme. It is sufficient if they had a mutual 22 understanding, a tacit understanding, whether spoken or 23 unspoken, to participat e in the scheme. 24 You will hear a lot of legal instructions about 25 the elements of mail fraud and everything else. But,

Summation - White

1 basically, there are two questions you have to answer. 2 One, was there a scheme to defraud here? Was 3 there a common plan to obtain money by false pretenses?
4 Second, if there was a fraudulent scheme, did
5 each of the defendants knowingly participate in it? So
6 let's look at that.
7 Now when you are considering as to whether this
is a fraudulent scheme, start with the center, the man at
9 the center, the man who designed it, who wrote the
10 solicitation letters and pitch sheets. He is the one who
11 designed and controlled every aspect of this business. 12 Think about the evidence you heard at this trial 13 about Mr. Gordon. It paint s a picture of a man who is 14 comfortable with lying, a man who uses lies to gain a 15 financial benefit for himself. 16 This is the man who deceived the people who are 17 closest to him in the whole world, his sister and husband; 18 the man who used his own son's death as an opportunity to 19 lie to save on taxes. 20 Do you think he would hesitate for a minute to 21 lie to total strangers, the customers of Who's Who, in 22 order to get their money? 23 Now, one other thing you should keep in mind in 24 evaluating if there is a fraudulent scheme here is two 25 very significant incidents you heard about in the

Summation - White

1 testimony. 2 The first is Wendi Springer, remember her? She 3 told you back in '92, a salesman named Martin Gross who
4 worked for Who's Who, for n othing having to do with his
5 work at Who's Who Worldwide. You heard he previously
6 worked for that guy Steve West who testified. And the
7 postal inspectors were there to arrest him for what he had
done previously at Steve West's company.
9 The postal inspectors show up at Who's Who
10 Worldwide offices. And Wendi says that Liz Sautter calls
11 up Mr. Gordon and says the postal inspectors are here. 12 And the instructions are to run around and take down all 13 the pitch sheets tacked up over everyone's desk? 14 If it is a perfectly honest and legitimate 15 business why is he worried about the inspectors seeing the 16 sales presentation, the pitch sheets? If he is not doing 17 anything wrong, why is he sending them around to tear down 18 the things. 19 The second incident is in 1994, and that comes 20 from Debra Benjamin. She says she was concerned that the

21 uses of the word "nominate" in those letters was 22 misleading. She had several conversations with Mr. Gordon 23 about it. And in 1994 she sent a copy of one of those 24 solicitation letters to Mr. Pierce, the company's 25 attorney.

Summation - White

1 When Mr. Gordon found out about that he went 2 ballistic, he was, quote, very angry at her for sending 3 the letter to the attorney. And he said to her not to
4 send letters like that to the attorneys in the future, who
5 are not going to tell him how to run his business.
6 What does it tell you? He is afraid to have his
7 own attorney, much less postal inspectors to see his
solicitation letters. It is his own lawyer, someone
9 paying for legal advice and he doesn't want to see it.
10 Why? Because he knows the attorney will say it is f alse,
11 misleading, and you can't send it out that way. 12 If there is nothing false or misleading why is he 13 afraid to have his own attorney see the letter. 14 Now, the judge will instruct you about how to 15 determine someone's intent. But he will tell you also 16 that direct proof of a person's intent is almost never 17 available. You have to infer a person's intent from 18 conduct, actions of all surrounding circumstances. 19 It is something we do in everyday lives. We have 20 a phrase, a saying that action speaks louder than words. 21 That's how you figure out what someone's intent is. 22 In this case when you analyze all the evidence, 23 keep those two incidents in mind. Ask them what they tell 24 you about Mr. Gordon's intent. 25 If there is no scheme to defraud and if it is

Su mmation - White

1 really an honest and legitimate business, why is he so 2 afraid to have them see his sales presentations. 3 First, let's look at what the defendants are
4 selling here. They are selling memberships in a Who's Who
5 organization. They are selling honor. They are selling
6 prestige, selectivity, recognition.
7 Everybody knows what Who's Who means. It means
the select few, it means important or accomplished
9 people. It has a common meaning that everyone
10 understands.
11 By its very nature the most important thing about 12 a Who's Who is how the people are selected to be in it, 13 whether it is really an honor to be in it. If virtually 14 everyone can be in it, it is not an honor to be in it. 15 Everyone can be listed in a telephone book, not 16 an honor. Nobody would pay $300 to be in the telephone 17 book. 18 Remember Reed R otatori? Do you remember after he 19 got the letter he told his father, can you believe it, 20 dad, I was nominated by Who's Who. He recalled the 21 conversation because he said shortly thereafter his father 22 died, and he realized it was one of the last things he 23 said to his father. 24 Nobody tells their father they were just selected 25 to be in the telephone book. It is because it is a Who's

Summation - White

1 Who. 2 You heard a lot of talk about networking, and 3 when Mr. Gordon created this operation, they didn't decide
4 to sell a business networking operation. They didn't call
5 people up and say we are compiling a list for business
6 networking, do you want to join? Those kind of business
7 to business directories are available.
No, he said we are selling a Who's Who

9 directory. Because that's what hooks people. That's what
10 motivates them to buy. The fact that they are told they
11 are special enough to be one of the select few. 12 Now, how do you know that that is what people are 13 buying? You don't have to take my word for it. Listen to 14 Mr. Gordon. Government's Exhibit 1390, one of the tapes 15 played at trial. Quote from Mr. Gordon. People buy this 16 to be in the registry. There's got to be a reason why. 17 They get the wall plaque, the benefits, the networking. 18 It is just icing on the cake. But the true value of this 19 thing, for them anyway, it has been going on for a hundred 20 years, I didn't invent this, okay, is the ego fuck. They 21 want to be in the book. They want their 15 minutes of 22 fame. 23 In other words, people are buying this because 24 they are flattered, because they know Who's Who is 25 supposed to be about honor and selectivity.

Summation - White

1 But you heard evidence that the customers were 2 lied to about that single most important thing, the 3 selection process and whether or not it was an honor to be
4 a member. And you heard all the things that the customers
5 were told. You have been nominated by someone who knows
6 you and thinks highly of you, select group of nominated
7 individuals, nominated by a board of governors.
Even out of his already exclusive group of
9 nominees, a fraction get selected. The slots are
10 limited. They only become available through attrition,
11 once or twice a year. There is a waiting list sometimes. 12 It is a well known organization which has been in business 13 many, many years, which publishes a leading and 14 authoritative refer ence publication. 15 You heard the evidence over the last few months, 16 you know it is not true. There is no board of governors. 17 No board of review. It was mailing lists exclusively. 18 You heard 98 percent of the customers were 19 accepted. The membership was not limited in number. It 20 wasn't through attrition. There was no limit. They were 21 all admitted. It hasn't been in business for many, many 22 years. They have fundamentally misrepresented to the 23 customers. It is not puffing or salesmanship. It is 24 making specific false factual misstatements about the 25 quality of the products, about the essence of what they

Summation - White

1 are selling. 2 The customers are not getting the product 3 represented to them. That's not just what the government
4 is telling you. That's what the customers who testified
5 told you.
6 You heard from 23 different customers that came
7 from all over the country, from all different professions,
walks of life. There were men, women, young and old.
9 Some dealt with Who's Who Worldwide, some dealt with
10 Sterling Who's Who. And they stand over the course of
11 several years from '91, '92, to '95. 12 The one thing they all told you in substance is 13 that the statements made to them about the selection 14 process, and about how it was an honor, or the most 15 important reason for their purchase. 16 All of them told you that if they had been told 17 the true selection process they would never have 18 purchased. 19 I want to review each of the false statements and 20 misrepresentations the defendants used as part of the 21 scheme. 22 First, nominations. 23 Defendants told people they were personally 24 nominated by another member or by someone who knew them. 25 How do you know that? Well, it is in the

Summation - White

1 solicitation letters, in the telephone scripts, it is on 2 tape. You heard the customers tell you that as well. I 3 will not go over all the places where that was evident.
4 You know that already.
5 You know that that is false and misleading. The
6 vast majority came from mailing lists, because those
7 letters have codes on them you can match up. Debra
Benjamin told you that.
9 She told you that she was concerned the use of
10 that word was misleading and she had repeated
11 conversations with Mr. Gordon about that. 12 She was called by a government witness, but 13 didn't she seem to you she was more sympathetic to the 14 defendants than the government? She was trying to be 15 truthful but put the best spin, the best face of it for 16 the defendants. Even she said they were misleading, the 17 letters. 18 How else do you know that? You heard from Alan 19 Saffer, a salesman there for five years. You heard he 20 pled guilty in connection with his work at Who's Who 21 Worldwide and agreed to testify and cooperate. 22 He said the amount of nominations were very 23 small. Nomination ballots were instituted in 1993, and 24 before that the number of nominations were in his words, 25 very, very few, way less than one percent. And even after

Summation - White

1 that, after the ballots were instituted, he said it was a 2 little higher, maybe two percent of the cards he got. 3 How do you know it is accurate? It is
4 corroborated by other evidence.
5 Wendi Springer told she was in charge of
6 reviewing orders and would see the paperwork.
7 She said occasionally, she saw a couple or a few
actual nominations.
9 Now, you heard a tape recording,
10 Government's Exhibit 1379, of Frank Martin, Mr. Osman. He
11 had a meeting at the Garden City Hotel where he was 12 applying for a job with Steve West who asked him about the 13 sales pitch at Who's Who, and asked him where was it 14 inconsistent with reality? 15 His answer, I expect the major flaw was telling 16 people that they were recommended by other members. 17 He said Who's Who never went out of their way to 18 get recommendations. 19 He says at the top, the few times people actually 20 did give names, we usually converted those into sales. 21 You know that there weren't really a significant 22 number of nominations because that's why Mr. Gordon 23 invented the line of how or what the salespeople would 24 tell people where their names came from. At my level, I 25 don't know, it is confidential, it can't be disclosed.

Summation - White

1 It is part of the scheme. You can't tell them 2 that they weren't really nominated. You tell them, oh, 3 it's confidential. It is the perfect comeback. It
4 deflects the customer's question. But it also suggests
5 the process is secretive and selective, which you know is
6 nonsense.
7 Now, it is not really relevant the defendants
will tell you where the names came from. But you know it
9 is wrong for several reasons.
10 Common sense. The most important attribute you
11 bring to your services here is common sense. Of course it 12 makes a difference if you are talking about a Who's Who 13 directory how you were picked. It is the most important 14 factor according to the customers you heard. 15 You know this from the customers. Virtually 16 every one of them told you that it was key to their 17 decision to purchase. 18 Now, you know that the customers thought that it 19 was material. 20 How do you know that the defendants also knew 21 that it was important to their customers and that they 22 were misleading them about important things. 23 Several ways. 24 Look at the tapes. When asked if their names 25 came from a mailing list, they all strenuously deny it.

Summation - White

1 Why? Because they know they would get hung up on if they 2 tell people it came from a mailing list. 3 Six different customers told you that they asked

4 that question, did I come from a list.
5 If there is nothing to hide and if it is not
6 important to the customer, why do they not tell the
7 truth? If it is not material why lie about it?
When they are asked, they say you came from a
9 list, do they say let me tell you about the exclusive
10 lists we use?
11 They would hear a click, no sale. 12 That's why Mr. Gordon told them not to say it is 13 from a mailing list. And time after time it was denied, 14 strenuously denied. It is like they were insulted if you 15 even ask the questions. 16 Look at another tape, 1369, one of the calls 17 going to Who's Who Worldwide. And they are told they 18 don't want to be chosen from a mailing list. 19 Mr. Martin's response, no. That's not the way we 20 go. Our registry, membership, if you will, is so 21 exclusive. That that is the last thing in the world we

22 do. The last thing he says. He is saying it is the polar 23 opposite, 180 degrees opposite from what we do. 24 You heard other tapes from the defendants, where 25 they also strenuously deny they came from mailing lists.

Summation - White

1 Scott Michaelson, no, we don't have anything like 2 that that I know of, a number of occasions. 3 Annette Haley, no, no, mail, no. Only about 70
4 percent of our -- seven percent of our candidates are even
5 expected.
6 You see, they know that customers would equate
7 the mailing lists with a lack of selectivity.
How else do you know that Mr. Gordon thought this
9 was material?
10 Well, again, Debra Benjamin says she went to him
11 multiple times about this word "nomination" in the 12 letters, and said it was misleading. 13 What was Mr. Gordon's responses? He said that 14 nominated works. That's what pulls the letters. She told 15 you what that meant, pulls the letters, a big response 16 rate. 17 In other words, he knows that telling people they 18 are nominated is what makes the difference. That's what 19 pulls the letters in. He knows that it is material. 20 Now, you heard the defendants say that they 21 thought -- you heard the defendants questioned suggest 22 that they thought it was okay to take the names from 23 mailing lists because Marquis Who's Who does it also. 24 Remember they called Sandra Barnes as a witness. 25 First of all, this trial is not a comparison

Summation - White

1 between how the defendants and how Marquis Who's Who does 2 its business. You have to decide based on the evidence 3 you heard if the defendant's conduct is fraudulent, not
4 how it compares to other people.
5 I have to confess, I don't know how the
6 defendants wanted to call Ms. Barnes? Why they think that
7 her testimony helped them. Because from their
questioning, and the exhibits she introduced, she made it
9 clear that Marquis does the opposite of what Who's Who
10 does. In other words, they send out brochures where they
11 tell people where they come from. Those brochures are in 12 evidence, Exhibit 1622. They say we get people's names 13 from periodicals, newspapers, associations. 14 They are not making any big secret of it. That's 15 what they are sending out to their customers. 16 The defendants here, they do the opposite. When 17 you ask, they strenuously deny it. Oh, no, absolutely 18 not. We are totally opposed to that, one guy says. 19 Now, I want to briefly run through what the other 20 misrepresentations are. 21 They said there was a committee and a board of 22 governors reviewing the applications or nominations. 23 Everyone told you it is not the case, Debra 24 Benjamin, Alan Saffer, Wendi Springer. Springer said she 25 is the only one checking the applications.

Summation - White

1 Acceptance rate, they said it was a very small 2 amount. When you look at the pitch sheets there is no 3 rhyme or reason to it. They are fluctuating daily. There
4 is no connection to reality.
5 In one three-day span in December of 1994, it
6 goes from seven percent, up to 20, and back down to 14.
7 If you listen to the tape telephone calls we
played, it is the same thing.
9 Even if it was consistent, you know it is not
10 true. Mr. Saffer testified that 98 percent got accepted.
11 Mr. Martin says on the tape I said before that 99 percent 12 are accepted. He says everyone short of a porno shop gets 13 accepted. 14 You know they are not rejecting 80 or 90 15 percent. But this gives the customer the false impression 16 that it is very selective, very exclusive, that they made 17 the cut. 18 They tell people that memberships are only 19 available through attrition, that there is a waiting list, 20 that a few memberships have just become available. They 21 are only available once or twice a year. Four different 22 customers told you they got that line. 23 You know that is false, too. Mr. Saffer told you 24 there is no waiting list, you don't have to wait for 25 attrition to get a membership. And it is corroborated by

Summation - White

1 all the 91 calls that Mr. West and Mr. Ihlenfeldt made. 2 They never were told, no, there is no memberships 3 available.
4 You were told -- you heard that they were told
5 that it is a membership run operation. And you know it is
6 not true, Mr. Gordon was in charge there.
7 Customers were told that they didn't solicit new
members. You know that's not true.
9 That they had been in business many, many years,
10 you know that is not the case.
11 Now, the defendants have talked a lot about the 12 screening of applicants. There is no evidence that this 13 took place, but I want to look at their theory. 14 First of all, the bottom line is 98 or 99 percent 15 of people got accepted. As I said, Mr. Saffer said it was 16 98 percent. He said the joke was at the company, if you 17 are breathing and you got a credit card you can be a 18 member of Who's Who Worldwide. 19 How is Mr. Saffer corroborated? 20 The tape with Mr. Osman on it, he says 99 percent 21 get accepted. 22 Those 91 telephone calls that Ihlenfeldt and West 23 made, 90 out of 91 the -- or 91 got accepted. 24 Wendi Springer told you the only person checking 25 qualifications for both Who's Who Worldwide and Sterling

Summation - White

1 were her. 2 A question put to her, how often were people who 3 were willing to pay for membership actually rejected?
4 Her answer, I can't think of anyone who was
5 rejected.
6 Then she amended it, she said I can think of a
7 couple.
She replied when Mr. Gordon was mad at Reed
9 Elsevier, and he went to the CD-ROM and kicked out the
10 people working for Reed Elsevier.
11 How else do you know that? 12 Do you remember Mr. Pierre, the young man from 13 Indiana who worked at Sterling in the summer of 1994, he 14 said they were taking everybody. He is the guy with the 15 assistance of a Robert Lamb, a manager there, who was 16 signing up a kid, who filled out the card in crayon. 17 How else do you know that they are not really 18 concerned about customers' qualifications? 19 Exhibit 1381, another tape, you hear Tara 20 Garboski, the sales manager, talking to new salespeople. 21 And she says, don't ask the customers about their 22 education or background. Don't ask them about any of that 23 crap. She says later it is irrelevant. 24 Let's look briefly at the four level screening 25 process, remember that phrase they loved to repeat?

Summation - White

1 The first one was mailing lists, so let's look at 2 that. 3 Debra Benjamin told you when they order the
4 mailing lists, they know nothing about the customers, not
5 their names.
6 Do you remember the people who got letters,
7 Mr. Library, and two people got letters addressed to
Ms. Ass, do you remember those.
9 You heard that Steve West, the guy they kicked
10 around a week on cross-examination, he was repeatedly
11 solicited for the honor of being in Who's Who Worldwide. 12 You heard from Mr. Saffer and on a tape to Frank 13 Martin they would cold call people at times. They would 14 just use Dunn & Bradstreet lists. 15 The defendants tried to suggest they used 16 selective lists, and all that means is they know their 17 targeted audience. You send people to -- letters to 18 people who might buy it. A guy who is a local dog catcher 19 might not want to be in Who's Who, and perhaps do esn't 20 have the money to pay for it. 21 You have to know your targeted audience, business 22 people may have the money to drop at people like this, if 23 you sell hair tonic, you sell to it bald people. If you 24 sell diet pills, you sell it to heavy people. You have to 25 know your target audience.

Summation - White

1 What is the second level of screening? They say 2 once the cards come back they are supposed to be sorted by 3 somebody for qualifications.
4 Wendi Springer told you that that didn't happen.
5 It was just sorted by those codes, that's all.
6 The next thing is the salesperson. They are
7 supposed to make a judgment. But, again, you heard it is
98, 99 percent they are taking. They are working on
9 quota. They have no incentive to uphold the lofty
10 standar ds of Who's Who.
11 Then the fourth level of screening was supposedly 12 Wendi Springer. And she said as far as she knows she is 13 the only person checking qualifications. 14 She goes to Mr. Gordon periodically, with people 15 she doesn't think are qualified, and he tells her to 16 change people's titles from assistant to associate. If 17 you are a store manager you create -- you have a better 18 title, like operations manager. 19 He said change owner to president. You put I N C 20 at the end of the company name so it doesn't look like you 21 are the only employee. 22 He told her to accept people with lesser titles 23 if it was a longer, more expensive membership. 24 She said it depended on the length of the 25 membership, what his mood was, and if the sales were good.

Summation - White

1 She said, quote, there were times I felt it was 2 bizarre for people getting accepted when I felt they 3 shouldn't be.
4 You heard tapes where Mr. Gordon says he doesn't
5 want McDonald's managers or postal employees in the
6 books. And the defendants are trying to suggest that it
7 shows he is concerned with qualifications.
It really shows you that Gordon is concerned with
9 how the directory looks on the surface only. He is not
10 concerned with actual qualifications, with actual
11 complaints. He just wants to know their title, so it 12 looks good, it looks impressive in the registry. He 13 doesn't want to know if you are outstanding in your 14 field. He doesn't want to know if you are the president 15 of IBM or the president of your own company you operate 16 out of your living room. If you are a president you are 17 in. It looks good.

18 No written qualifications whatsoever. You have 19dozen of telemarketers talking to people on the phone. If 20 the standards are important, don't you think at least once 21 Mr. Gordon would have spent time to try to outline what 22 those qualifications were? 23 You heard him on the tapes explaining how you 24 should pronounce "it sounds wonderful Mr. Jones." You 25 remember that?

Summation - White

1 If qualifications were so important he could have 2 spent that time explaining what the standards were. 3 You heard 1389, a tape from Tara Garboski saying
4 that's what you are paid to do, to sell them.
5 What did I say? You got to smell blood. You got
6 to be like you are a hunter, right? She is lecturing the
7 salespeople. You got to know when. It is an instinct in
sales, as I ref erred to it, go for the jugular. You got
9 to know when. It is an instinct. Go in for the kill,
10 that's what it is all about.
11 Further on down she says, if you don't ask for 12 the order it ain't coming to you. You got to have balls 13 as Bruce puts it, brass ones, because if you are afraid to 14 ask you are not going to get, meaning the order. 15 Does that sound like someone who is worried about 16 customers meeting strict criteria? Or does it sound like 17 someone who will send to anyone who is breathing and has a 18 credit card? 19 You also heard a tape where Mr. Gordon says, 20 don't lie. Anyone lies and you are out of here. 21 Well, Mr. Gordon has already done the lying for 22 them. He created the pitch sheets and solicitation 23 letters containing the lies. And you know that they have 24 lies. He is not stupid. He is not going to stand up in 25 the middle of the office and announce that I want you to

Summation - White

1 lie, I want you to defraud people. He puts it on the 2 pitch sheets and tells them to repeat it and they do. 3 Now, let's talk about the benefits. The
4 defendants have talked a lot about the benefits offered to
5 members, so let's take a look at it.
6 There is no dispute that they were offered
7 various things, the CD-ROM, discount and other things.
The fact that there were benefits doesn't mean
9 that there is not a scheme to defraud here. Look at it in
10 the context of all the other things you heard.
11 First of all, most of them doesn't start until 12 late '93, '94, the last 15 months of a five-year 13 operation. So they weren't available to members who 14 joined in in, '91, '92 and most of '93. They claim to

15 have 15,000 members so the vast majority must have joined 16 before '93. 17 Even if the benefits excuse false statements to 18 customers in '94 and '95, which it doesn't, what about the 19 ones for the earlier years? What is their defense? Well, 20 we only defrauded 30 or 40 thousand people and not 60 21 thousand. 22 Another thing to consider is if the benefits of 23 this organization is so great, why not just tell the truth 24 about the organization? That's a novel idea. Why not 25 say, hey, we got your name from a mailing list. We take

Summation - White

1 almost everybody. But we do have some great benefits and 2 discounts. Do you want to join? If they did that then 3 customers can make an informed decision about whether or
4 not to join.
5 The defendants are not confident enough in their
6 product to tell the truth about it. Keep in mind the
7 benefits by and large are just additional money making
opportunities for Mr. Gordon.
9 You trick them into buying memberships by false
10 statements. And then you sell them extra stuff.
11 You want a CD-ROM, give us more. You want 12 discounts? Mr. Gordon gets a cut and he doesn't want the 13 customers to even know that. 14 So, when you look at all the evidence, you know 15 that a conspiracy, a scheme to defraud existed here. 16 The judge will instruct you that a scheme to 17 defraud involves making false or misleading statements 18 about material things in order to obtain money. And 19 that's exactly what you have here. The defendants lied 20 about the nomination and selection process, the honor and 21 exclusivity of the organization. 22 Remember, I said that there are basically two 23 questions: Was there a scheme to defraud here? If so, 24 were the defendants members and participants of it? 25 So, let's look at the individual defendants.

Summation - White

1 First, of course, there is Mr. Gordon. 2 There is no dispute that Mr. Gordon conceived and 3 designed and oversaw this scheme. He ran it on a
4 day-to-day basis.
5 The heart of this fraud is in the solicitation
6 letters and the telephone sales scripts that Mr. Gordon
7 wrote. There is no dispute about this. The solicitation
letters, he is on tape talking about what he puts in the
9 letters. Debra Benjamin told you he wrote the letters.
10 There are draft letters he signed off on in his
11 handwriting, where he writes, okay, BG on it. 12 The pitch sheets, Mr. Saffer says that Mr. Gordon 13 prepared them. There is a tape in evidence where 14 Mr. Gordon say, I wrote all the lines, meaning the pitch 15 sheets, so they are all my favorite children. 16 He is the one directing the whole enterprise and 17 the other defendants follow his instructions. You know 18 they followed his instructions because here they are all 19 literally following the script. 20 You know that he knew this was a fraudulent 21 scheme from the two instances I described before. He is 22 afraid to let the postal inspectors and his own attorneys 23 see the sales presentations. 24 As the judge will instruct you, actions speak 25 louder than words.

Summation - White

1 Let's look at the other defendants now. 2 Before I do that, though, a lot of the evidence 3 that you heard about the other defendants came from tape
4 recordings that were made by government informants. And
5 you heard from three of them. Steven Watstein, or Steven
6 West, Elliott Zerring and Eric Ihlenfeldt. You heard they
7 all pled guilty to other crimes and cooperated with the
9 The defendant spent a lot of time cross-examining
10 them about their criminal record. But the most important
11 thing to ask yourselves is: Does any of that change what 12 the defendants said on those tapes? 13 All of that cross-examination was designed to 14 distract you. They are hoping you will say, they are bad 15 guys, Zerring and West, and not focus on what the 16 defendants say on the tapes. 17 You have to keep your eye on the ball, focus on 18 the real issue. The government is not asking you to take 19 the word of Steve West or Elliott Zerring. That's why 20 they were sent in with tape recorders, so it would be on 21 tape and you wouldn't have to rely on their word. 22 It doesn't matter whether the guy with the 23 recorder is a convicted criminal or a priest or a rabbi or 24 a minister, the tapes speak for themselves. 25 The defendants made a lot of the questions that

Summation - White

1 were asked, asked in the telephone calls, made a lot out 2 of it. 3 Do you have seminars, how did I get selected?
4 Look at the answers and not the questions.
5 Nobody made the defendants give false answers.
6 When asked, did I come from a mailing list, they
7 could have said yes. But they don't. They lie.
Let's look first at Mr. Osman or Frank Martin.
9 You heard he worked at the company '91, to '92, and left
10 and came back the end of '94, the beginning of '95.
11 The first tape to look at is 1379, as I mentioned 12 before. That's the one where he is meeting with Steve 13 West at the Garden City Hotel. Where he thinks he is 14 applying for a job with Steve West. 15 First he brags that he single-handedly built up 16 Who's Who Worldwide. 17 He says something interesting. He tells people 18 to stay with the presentation because, quote, the postal 19 authorities and all those other bad guys out there might 20 be listening, unquote. 21 Why does he think that the postal authorities are 22 the bad guys? What does it tell you about his mind set, 23 his intent? Why is he einking about postal 24 inspectors listening in? Do legitimate businesses think 25 about that? It is like Mr. Gordon afraid of law

Summation - White

1 enforcement finding out. 2 Then he is asked, where is the sales presentation 3 inconsistent with reality?
4 He says, I suspect the major flaw was telling
5 people they were recommended by other members.
6 That's the major flaw. He knows it is not true.
7 He knows it is inconsistent with reality.
West asks him, was everybody accepted there?
9 He gives the answer, basically everyone accepted,
10 except if you are a porno shop.
11 99 percent accepted? 12 He indicates, yeah, they got the money. 13 Listen to what he says when he knows -- doesn't 14 know he is being taped. You don't have to accept the 15 government's word 99 are accepted, take Mr. Martin's. 16 Don't take the government's word that everyone except a 17 porno shop get accepted. Take his. 18 After he returns in 1994 he has another telephone 19 conversation you heard about, Exhibit 1359. Look at what 20 he said, directly c ontradictory to what he said in the 21 earlier tape. 22 He talks about Who's Who is a small member-run 23 organization. 24 Just the fact that you were nominated for 25 inclusion is quite an honor in itself. He says we have a

Summation - White

1 lot of names in businesses, the creme did he la creme in 2 American Business Today, the sciences, the arts, and what 3 have you. And obviously someone thought enough of you to
4 nominate you for the registry.
5 This is the same guy who said everyone except the
6 porno shop gets in.
7 The same tape he is asked about the mailing list,
and he says, that's the last thing in the world we do.
9 Now, you also heard that one of his jobs as a
10 salesman was to train new salespeople. And if you look at
11 Exhibit 1399, you hear him telling the salespeople that 12 after that, after they talk about it to the says people, 13 you have to pause a little and say, you have to keep up 14 the whole facade, like you are considering whether they 15 are qualified. He says it is like you are really make the 16 decision with respect to what you have before you, and 17 wait the fraction of a second, well, based on the 18 information I have here, just like that. That's what he 19 tells them. He knows that there is no real decision. You 20 just get in. 21 You heard him say on Exhibit 1397 that economic 22 times aren't good when people are a little more careful 23 with their money. Quote, we have to be a little bit more 24 creative as to find out ways to separate them from their 25 monies.

Summation - White

1 Other tapes he talks about mailings, knowing that 2 mass mailings are going out. 3 By his own words on the tape he knows he
4 willingly participated in the scheme.
5 Next we talk about Steve Rubin or Walden. He
6 worked there a year from March of 1994 to early 1995. How
7 do you know that he participated in the fraud?
Well, he admitted it to Agent Jordan when he was
9 arrested on March 30th, 1995 in his home. He said he knew
10 he lied to customers on the telephone at Who's Who
11 Worldwide. He lied to them by telling them that Hilton 12 Head took place when he knew it had not. He lied about 13 how long he had worked there. He said he was only there a 14 year and he told people five years. He lied when he told 15 people they were nominated. He knew that they were not 16 and their names came from lists. 17 Mr. Dunn tried to suggest it is in his opening 18 that Mr. Rubin didn't really make that statement. 19 Why would Agent Jordan get up here and testify 20 that he did. You have seen him. He is from the IRS. He 21 has nothing to do with Steve Rubin. He is here for the 22 tax part of the case. He just happened to be there when 23 Mr. Rubin was arrested. He is not getting some gold star 24 if Mr. Rubin gets convicted. 25 Mr. Dunn suggested that there is no written

Summation - White

1 statement suggesting something. 2 You heard Mr. Rubin was in the car when this 3 happened. He had handcuffs on. It is difficult to write.
4 Look at all the other facts when you really think
5 if he said this really.
6 He said he was cooperative. He said he wanted to
7 sue Mr. Gordon because he got in trouble. He said it was
Mr. Gordon's fault that he got arrested. He gives them

9 documents from the trunk, from the apartments.
10 He said he lied about Hilton Head. And Debra
11 Benjamin told you that she heard him lie about Hilton 12 Head, that it took place. 13 Look at the tapes, Exhibits 30 and 33 he is on, 14 he does the same thing, lying about how long he has been 15 in the company, nominations. There is a tape where he 16 talks in detail about the mailing lists. He knows how 17 much they cost, that they use it. 18 When you go through each of the tapes you will 19 hear each of the defendants make false statements. 20 Mr. Rubin talks about how the acceptance rate is 21 very low. It is not common he gets to talk to people who 22 are not multibillionaires and CEOs. 23 He is asked, did I actually get nominated or come 24 from a mailing list. 25 He says there is no doubt you were nominated. He

Summation - White

1 says the Vietnam seminar was successful. He says Boris 2 Yeltsin was a member. 3 There is one very important thing you should
4 notice. In Exhibit 1330 -- I am sorry, 1333, the caller
5 says to him, well, I am not -- I just want to make sure.
6 You sound like a prestigious group. I just want to let
7 you know I had some legal problems like a few years ago.
Is that going to be a problem?
9 Keep in mind he is supposed to be screening
10 people out so they are very qualified, and they might do
11 business and network with the other Who's Who members. 12 This guy is saying I had a legal problem. You 13 don't know what it is. Maybe his legal problem is I am 14 bankrupt, maybe I defrauded my clients or defrauded my 15 customers, maybe I am a mass murderer. 16 He says is that a problem, legal problems?

17 Mr. Rubin shoots back, no, why should it be. It 18 is not our concern, our concern is you have been rated for 19 exceptional excellence by your peers. He doesn't care. 20 He just sees the sale. 21 With respect to Mr. Rubin, you heard from several 22 customers, that you can match up the customer with the 23 defendant by looking at the order form that has their name 24 up on the top right. And Mr. Rubin dealt with three 25 customers you heard about here. Thomas Schaeffer, Linwood

Summation - White

1 Schultz and Fred Simmens, and all of them told you the 2 same thing. They were told they were nominated, it was 3 anonymous, it was a peer of mine that knew them
4 personally, that they were in very exclusive company.
5 Now, let's look at the other defendants. Did
6 they know what was going on?
7 Look at the way the company operated, and you
will reach the conclusion that everybody knew. They had
9 to have known. All the rest of the defendants were there
10 three, four, five years. They were among the top sellers
11 at the company, and Ms. Garboski was a manager. 12 The fact that the names came from lists was known 13 at the company. Rubin it was there a year, he knew. 14 Ellery Pierre at Sterling, he is there nine weeks and 15 knows. 16 Saffer says that Mr. Gordon would talk about 17 mailing going out to specific industries. Mr. Gordon is 18 on tape talking about how much the card cost, the mailings 19 cost. Martin is on tape talking to new salespeople that a 20 mass mailing is going out. This is what they are telling 21 the new salespeople. How can people there three or four 22 years, not know this. 23 There was a pattern. Saffer said you knew a 24 mailing was going out. The cards would come back in 25 groups. All of a sudden you have cards coming back in

Summation - White

1 engineers. You know it is not all of a sudden an engineer 2 tried to nominate his good friend, another engineer to 3 Who's Who.
4 When they are on the phone, they know the kind of
5 cards in front of them. Is it a nomination ballot or a
6 lead card.
7 1393, Ed Schaeffer, a manager has one of those
cards where it is half and half, there is a lead card on
9 the one side, and they ask that person to nominate someone
10 else.
11 He talks about distinguishing the two sides, one 12 side is the person actually nominated, versus the person 13 who received the invitation to be included. There is no 14 secrets there what is going on.

15 You have to be deaf, dumb and blind to work there 16 three, four years, and not know. 17 What is going on? 18 Next Tara Garboski. She worked there for five 19 years. You heard she worked her way up from a salesperson 20 to a manager. There is no way she could be there in that 21 position for that long and not know. 22 People above her knew and people below her knew. 23 In other words, Mr. Gordon certainly knew what 24 was going on. You heard Mr. Rubin who is below her who 25 has only been there a year, he knows what the deal is.

Summation - White

1 Frank Martin you know what his deal is, he is at the same 2 level as her. 3 How is it she could be there and not know no what
4 the story was? Does anybody say, don't tell Tara? She
5 doesn't know we use mailing lists.
6 She is in charge along with Mr. Gordon of
7 revising and changing the pitch sheets. You heard her
explain on the tape how she the making changes.
9 You heard the same I smelled before -- I
10 mentioned before, you have to smell blood, and be like a
11 hunter. You have to go for the jugular. Does that sound 12 like someone interested in screening qualified 13 candidates? 14 Mr. Schoer asked a whole bunch of witnesses, do 15 you remember Tara's instructions, follow the pitch 16 verbatim? 17 I don't know how Mr. Schoer feels that that helps 18 her. The pitches contain lies, if she is telling people 19 to follow the pitch verbatim, she is instructing them to 20 lie. 21 Look at Scott Michaelson. Now, he has been there 22 for a number of years. He is one of the top salespeople. 23 He was in this black room that Saffer described for you. 24 Let's look at the tapes that he made. 25 First, Exhibits 1308. It is the one where

Summation - White

1 Mr. West was posing as Ed Grimaldi, the beauty salon 2 owner. 3 He tells him, again, acceptance rate is very
4 small, a thousand out of 6,000. He says, I am not on some
5 kind of mailing list, am I?
6 No, not that I know of. We have to reject more
7 people than we actually accept.
Mr. Neville made a lot to do about when he
9 cross-examined Mr. West. That Scott Michaelson says, we
10 wouldn't take your money for the longer membership, we
11 would just sell you a two-year membership. 12 At the end of the application he is ready to take 13 Mr. West's credit card number. He is willing to sell him 14 the two-year membership. 15 Again, Exhibit 1326, another call with Scott 16 Michaelson on it. He is asked, I am not on some dumb 17 mailing list am I? 18 No. Because we don't have anything like that 19 that I know of. We have ballots and everything we work 20 on. 21 Would you say that you are quite selective? 22 Oh, yeah, I would have to say we receive roughly 23 6,000 requests each month for inclusion. We only accept a 24 thousand new members. 25 Again and again, he says that on the tapes. You

Summation - White

1 were nominated. It is very selective. Only a small 2 percentage get accepted. 3 Now, who are the customers who testified that
4 they related to Mr. Michaelson.
5 One was Rita Rieger, remember her? A pharmacist
6 from California. She was the first customer you heard
7 from. She was told that these was nominated for a very
prestigious award.
9 She asked who?
10 Anonymous, but members were selected by
11 nomination from other members. 12 Her information would be submitted to and 13 considered by a board of directors. 14 If a person didn't review it, then that slot 15 would be going to somebody else. 16 She was told a small chance to be accepted into 17 membership. 18 If you remember Charles Smith, he is from 19 Illinois. He was the guy interested in trying to get his 20 methane gas off the ground. You remember that? 21 He also dealt, according to the order form with 22 Scott Michaelson. He was told the same thing. His name 23 was put in nomination. It was very exclusive. Someone 24 had to leave the directory before someone else could be 25 submitted for approval.

Summation - White

1 He said, I thought if someone went to the trouble 2 of recommending me, I would join. 3 Now, the defendants have also suggested that,
4 well, there is a lot of swapping going on. You can't
5 necessarily say because someone's name is listed on the
6 order form that they didn't necessarily speak to the
7 customer.
That is a nice theoretical argument. But as a
9 practical matter, these defendants are the best sellers.
10 You heard that when swapping would occur is when someone
11 didn't make their quota, and needed to borrow a sale from 12 somebody else who had. But these are the people who are 13 in this so-called black room. They are the best sellers. 14 They are the people who hardly ever miss their quota. Of 15 all the people in the company they are the best. They are 16 the people who least frequently needed to swap. 17 Look at Annette Haley next. Exhibits 1325 and

18 1361 are the tapes she is on. 19 1325, she says, again, talking about exclusivity, 20 only 6,000 apply each month, but we don't accept 21 everybody. We only accept five percent. 22 She also says that the seminar in Vietnam took 23 place, when you know it didn't. 24 1361, this is the guy who is the president of -- 25 owns two sub shops. He says, how was I selected?

Summation - White

1 You were nominated by an established member, she 2 says. 3 Mailing list? No, no, no, we don't. I would say
4 about seven percent of candidates are even accepted.
5 Again she says Vietnam and Hilton Head took
6 place.
7 Now, what customers relate to her?
There is Wilma Pincham, James Spencer -- Wilma
9 Pincham and James Spencer.
10 You will remember, she was the woman from

11 Washington, Pincham, the person who ran a business to 12 train parents to take care of foster care children. She 13 was told she was nominated by someone who considered me 14 outstanding in my field or profession. 15 She was asked who, and she was told she wasn't 16 allowed to be told. That only the cream of the crop got 17 to be members. 18 She said there would be a special dinner, or she 19 would be brought back free and honored at the dinner, all 20 the new members. 21 James Spencer, again, was told he was nominated. 22 He was told it was a member-run organization. He said the 23 only two ways you can become members is one by nomination, 24 and the other being a certain limited number of people 25 invited to join on the basis of their publicized

Summation - White

1 accomplishments. 2 He said the whole business about nominations, 3 definitely made me feel good that somebody recognized my
4 accomplishments, level of success.
5 Finally, Laura Weitz.
6 THE COURT: Mr. White, please start to conclude
7 your summation.
MR. WHITE: We are breaking at 1:00?
10 MR. WHITE: I will finish by then.
11 Finally Laura Weitz, you heard she was at the 12 company the longest, there for five years. Mr. Saffer 13 testified that she was there before he was. Therefore 14 several tapes she was on. 1324, she said the Hong Kong 15 and Vietnam seminar was dynamite. Her words. They only 16 accepted one sixth of people who apply. Two ways to 17 become a member. Nomination by a member or having an 18 article published by you. 19 Exhibit 1327, again she says Vietnam took place, 20 only seven percent are accepted.

21 1350, only two ways, nomination, or if you have 22 been published or written about. 23 She says, you are not from a mailing list, and 24 only 14 percent are accepted. 25 Who are the customers that relate to Laura

Summation - White

1 Weitz? 2 There are three of them. Lester Wheeler, Terry 3 Swinney and David Ray. Swinney was the man who worked for
4 Boeing in Philadelphia. He said after his conversation,
5 he asked around in his company about who may have
6 nominated him. He said they told me I had been nominated,
7 and based on my credentials I would go before a board.
She made me feel I was one out of a million people who
9 were nominated and only a very few select people would
10 ever be gie opportunity to join Who's Who Worldwide.
11 He asked about a mailing list, and he was told, 12 no. He was truly nominated. 13 Lester Wheeler, do you remember him? From Fort 14 Worth, Texas. He was a retired military officer. He was 15 currently a Mr. Mom. His wife worked and he took care of 16 his kids. 17 He said that the customer -- that the 18 salesperson, in this case it turns out to be Ms. Weitz, 19 talked about his jobs, and she indicated it sounded like I 20 was a good candidate for selection in Who's Who. And she 21 would go forward with my nomination. 22 During that discussion I said, I feel very 23 honored about being nominated. Can you tell me who 24 nominated me? 25 She said, no. We are not at liberty to discuss

Summation - White

1 it. 2 She -- he asked who it might have been, she said 3 she couldn't disclose it.
4 He said the person at the other end of the line
5 in discussing my purchase, emphasized over and over again
6 that it was a selective process by which I was nominated.
7 Someone told them I was a qualified candidate. He said, I
felt honored. He said selection by a nomination connotes
9 an honor and distinctive situation where an individual is
10 recognized for something that was done or to be done.
11 Finally, Mr. Ray. You will recall he was someone 12 who worked a long time for CVS, the pharmacy chain. He 13 was from Upstate New York. 14 He was told that I had been nominated to be a 15 candidate. That members were nominated. It was a process 16 of screening that he would go through. And that not all 17 the people who were nominated would become members. 18 Now, let's talk about the corporations. They are 19 also defendants here. 20 You heard -- Judge Spatt will instruct you that 21 the corporations can be criminally liable for the acts of 22 their employees. And that's true even if they are 23 violating company policy. 24 Here they are following it. But even if they are 25 violating policy the corporations can still be liable.

Summation - White

1 They have to have an intent to benefit the 2 corporation and what you are going to be told about the 3 law. But here every salesperson in making sales for those
4 two companies is acting to benefit both himself and the
5 corporation. They get a 12 percent commission. So every
6 sale they make, the company gets 88 percent, and they get
7 12.
So, look at their actions, what they are doing in
9 the pitches, the telephone calls, including Mr. Gordon and
10 all the others. If you think that they engaged in a
11 scheme, then the corporations did as well. 12 Now, for their intent, the intent of the 13 corporations, you look at what the intent of the employees 14 is. 15 Take a brief look at that. Exhibit 1384, the 16 tape you heard near the end of the government's case. And 17 it is a conversation among two different -- among several 18 Worldwide salespeople. 19 You heard one, a guy named Richard Pace say this. 20 If they want to pay me a salary to fucking scam 21 and bullshit, I am not liable. 22 What does it suggest to the intent of the 23 corporation as a whole if that's what the salespeople are 24 thinking. 25 Exhibit 1383, a discussion with another

Summation - White

1 salesperson, George Robins, they talk about the line in 2 the pitch where we are not a marking comp any. And Robbins 3 says, yes, we are lying.
4 Again, also on 1383, Mr. Pace again, he talks
5 about selling this Who's Who directory, he says it makes
6 him nervous on the phone. He says, quote, I am trying to
7 sell them the fucking Brooklyn Bridge over here, unquote.
Now, you heard about Sterling from Ellery Pierre
9 who worked there. He said they are signing in everybody.
10 If you write it in crayon. If you are a kid, and your
11 mother gives you the credit card number, they sign you up. 12 You heard about -- all the tapes we played about 13 people who weren't defendants but who worked for Sterling, 14 and all that you can consider as to whether or not each of 15 these corporations had an intent to defraud. 16 There is a very significant tape, 1386, which is 17 a conversation recorded with a Sterling salesperson. 18 Mr. Ihlenfeldt who was here asked him about a certain 19 document, a form he had to fill out when Ihlenfeldt worked 20 there for like a week. And, remember, he had been given a 21 phony name to use on the phone. So he asked the 22 salesperson, what do I put on this form? He said do I put 23 my real name down here? 24 The manager responds, no. You never put your 25 real name. In a court of law you won't be recognized.

Summation - White

1 What does that tell you about his intent? They 2 are worried if they have the real name on company 3 documents they could be worried about being identified in
4 a court of law. Is that the way an honest, legitimate
5 operation operates?
6 Finally, let's look at the perjury count. You
7 heard that Mr. Gordon is charged with perjury in addition,
about lying about this Vietnam conference.

9 Perjury is just lying under oath about a material
10 matter. The trial where he testified is that lawsuit
11 where you heard that Marquis Who's Who filed against him. 12 Now, Debra Benjamin told you that this conference 13 did not take place. There was an attorney's group that 14 was also going, they initially discussed sharing the hotel 15 or air reservations, but nothing ever came of it, no Who's 16 Who members wanted to go. Never went beyond the talking 17 stage. 18 Mr. Gordon knew this as the president of the 19 company. He had to. He was the guy who knew the number 20 of cards in every stack, who signed every check, worried 21 about people saying, this is wonderful, sounds wonderful. 22 Let's look at what he said here with respect to 23 sponsoring a seminar -- before we do that, the suggestion 24 from Mr. Trabulus when he was examining Ms. Benjamin and 25 others, he said the questions may have been misunderstood

Summation - White

1 and all that. 2 His trial testimony, by the way is in evidence. 3 First on February 17th, 1994, at that trial.
4 Question: When did you have your first Who's Who
5 Worldwide seminar?
6 Answer: December. I know the plane left the
7 conference about December 28th to Vietnam and Hong Kong.
Then he clarified it was December of 1993.
9 Now, he is not asked when did you have to have
10 your first Who's Who seminar. He is not asked when did
11 you hope to have your first Who's Who seminar? When were 12 you scheduled to have your first seminar? He is asked, 13 when did you have it. 14 The plain meaning of that is when did it take 15 place? And he said, December of 1993, when we know that 16 is not correct. 17 From the next day he is asked additional 18 questions, and it refers from a document, a trial exhibit 19 at that trial, also an exhibit here, where it lists Who's 20 Who Worldwide business seminars. 21 He is asked: Has that actually occurred? Has 22 this benefit been provided Mr. Gordon? 23 He is asked, did that actually occur? He knows 24 they are not driving at, well, did you plan to have it? 25 Nothing like that.

Summation - White

1 Has that actually occurred? Has that benefit 2 been provided, Mr. Gordon? 3 That's what he is asked:
4 Yes.
5 Next question: When did it start?
6 He says December 28th, 1993.
7 Does he say it didn't start? We never got beyond
the talking?
9 Then he goes on to a long description about what
10 its purpose was.

11 Then a little bit later he is asked again, where 12 was this first seminar? And he answers Hong Kong and 13 Vietnam. 14 He wasn't asked, was there a seminar. He is not 15 asked, where is it supposed to have taken place? He is 16 asked, where was it. He says Hong Kong and Vietnam. 17 You know that that is false. There is no dispute 18 that it didn't take place. 19 How do you know it is material? 20 You had Mr. Tardera testify, who was an attorney 21 for Reed in the appeal from lawsuit. And you heard that 22 one of the issues there, was Reed an organization like 23 Who's Who Worldwide? And Worldwide thought it was helpful 24 to point out, no, we are a membership organization and we 25 have all these benefits.

Summation - White

1 So, that's what he was trying to get across, we 2 have benefits, members can go there and can network at the 3 conferences.
4 Next, it didn't take place. It is not true.
5 Nobody was interested in going? That's material. The
6 definition of material is if it is capable of influencing
7 the decision maker at that trial. And that certainly is.
Now in sum, you know what went on here. When all
9 is said and done about this, it all boils down to the fact
10 that the defendants were lying on the telephone to
11 customers to get their money. It is as simple as that. 12 They were lying about things that were important, that 13 were material to customers. 14 All the charges in this case boil down to simple 15 lies: Lies to the IRS, lies to the bankruptcy court, lies 16 to the Court in the civil trademark lawsuit, and lies to 17 the customers of Who's Who Worldwide and Sterling Who's 18 Who. 19 You know there is just too many lies. There is 20 just too much of a pattern for these to be innocent 21 mistakes or harmless sales puffery. You know they were 22 intentional and that the defendants made them with the 23 purpose of concealing and with an intent to defraud. 24 So, in conclusion the government submits that the 25 evidence you heard at this trial proves the defendants

Summation - White

1 guilty beyond any reasonable doubt of the crimes charged 2 in this indictment. 3 Thank you.
4 THE COURT: Members of the jury, we are going to
5 recess now for lunch. Your lunch is waiting for you.
6 Please do not discuss the case. Keep an open mind.
7 You will not start deliberating until all the
summations are concluded, my instructions to you on the
9 law is concluded, and you are in the room exchanging views
10 for the first time.
11 We will recess until 2:00 o'clock. 12 Have a nice lunch. 13 (Whereupon, at this time the jury left the 14 courtroom.) 15 THE COURT: We need all the time. So I will make 16 it at 1:45. We are coming back at 1:45. 17 (Luncheon Recess.) 18 19 20 21 22 23 24 25

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March 24th PM session

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This site is concerned with The Illicit Smashing of Who's Who Worldwide Excecutive Club, and the double scandal of government and judical corruption in one of the Unholy Federal Trials and the concomitant news media blackout regarding this incredible story.

Sixteen weeks of oft-explosive testimony, yet not a word in any of 1200 news archives. This alone supports the claim that this was a genuinely dirty trial; in fact, one of the dirtiest federal trials of the 20th century.

Show your support for justice, for exoneration of the innocent, and for that all-important government accountability, by urgently contacting your Senator, the White House, and the U.S. Department of Justice.

The Illicit Smashing of Who's Who Worldwide Excecutive Club
How Thomas FX Dunn proved himself the worst attorney in America

Unholy Federal Trials  - The Illicit Smashing of Who's Who Worldwide Excecutive Club

Worst Lawyer Of All Time; - The Who's Who Worldwide Registry Tragedy
Thomas FX Dunn demonstrates some thirty-eight discrete reasons to qualify himself
over and again as perhaps the worst lawyer of all time